Sell-Off Sentiment Dominates, Shanghai Spot Copper Discounts Continue to Widen [SMM Shanghai Spot Copper]

SMM, June 24:

The SHFE copper 2607 contract traced an "M"-shaped pattern during early trading. It opened at 103,000 yuan/mt, pulled back slightly to a low of 102,900 yuan/mt, then edged up to touch a session high of 103,360 yuan/mt. The price subsequently fluctuated between 103,180 yuan/mt and 103,360 yuan/mt, pulled back slightly again, then rose to close at 103,180 yuan/mt. The backwardation spread between the front-month and next-month contract ranged from 50 yuan/mt to 10 yuan/mt, and the import profit margin for SHFE copper against the 2607 contract stood at a loss of 80 yuan/mt to 30 yuan/mt.

During the day, sales sentiment for copper cathode in Shanghai registered 2.89, up 0.04 MoM, while purchase sentiment came in at 2.77, up 0.09 MoM. Historical data can be queried in the database. At the start of early trading, suppliers initially quoted standard-quality copper at discounts of 50 yuan/mt to 20 yuan/mt, with brands such as JCC, Lufang, and Xiangguang quoted at discounts of 30 yuan/mt to 20 yuan/mt, and Dajiang PC, Tiefeng, Zhongjin, Xikuang, and Zhongtiaoshan quoted at discounts of 50 yuan/mt to 30 yuan/mt. Suppliers then quickly lowered their quotes, with Dajiang PC, Tiefeng, Zhongjin, Xikuang, and Zhongtiaoshan moved to discounts of 80 yuan/mt to 70 yuan/mt, while Jinguan, Jinxin, Jintun PC, and Jinfeng were quoted at EXW parity. High-quality copper brands such as Guixi, Jinchuan (plate), and Jintun (plate) were quoted at premiums of 10 yuan/mt to 20 yuan/mt. Registered SX-EW copper, including ESOX, was quoted at discounts of 100 yuan/mt to 80 yuan/mt. In the second trading window, suppliers further cut their quotes: Lufang, Xiangguang, and JCC were offered at discounts of 60 yuan/mt to 40 yuan/mt; Tiefeng, Zhongjin, and Xikuang at discounts of 100 yuan/mt to 90 yuan/mt; registered SX-EW copper ESOX was quoted at a discount of 120 yuan/mt; and non-registered copper was traded at discounts of 220 yuan/mt to 200 yuan/mt.

Looking ahead to tomorrow, on the regional structure side, available supply in Changzhou is notably more ample than earlier, effectively easing the previously tight situation and weakening support for local spot premiums. On the supplier behavior side, as the month-end settlement period approaches, market sentiment for offloading cargo remains high, and suppliers show a strong willingness to cut quotes further, with discounts for some brands widening to near 100 yuan/mt during the day, a trend expected to persist tomorrow. Demand side, after copper prices moved lower, some copper semis processing enterprises reported an uptick in orders. SMM learned that some end-users placed orders concentrated in the 102,500-103,000 yuan/mt range, indicating that current price levels remain moderately attractive to downstream buyers, with dip-buying willingness improving. However, given aggressive discount selling from suppliers, downstream players still mainly push for lower prices, lacking willingness to chase higher. The import loss narrowed significantly to 80-30 yuan/mt, approaching the breakeven point, and subsequent inflows of cargo from outside China warrant attention. Overall, driven by the combination of selling pressure and downstream dip-buying, spot copper premiums in Shanghai against the 2607 contract are expected to remain at a discount or widen slightly tomorrow.