SMM, August 11:
In early trading, the SHFE copper 2608 contract shot up and then retreated, only to rebound again. The contract opened at 108,220 yuan/mt and quickly rose, mostly trading between 108,500 and 108,650 yuan/mt. Then it edged down to 108,370 yuan/mt, and after stabilizing, moved up again, reaching an intraday high of 108,730 yuan/mt. The closing price was 108,620 yuan/mt. The backwardation spread between SHFE copper futures was 300-360 yuan/mt, and the import profit/loss for SHFE copper against the front-month 2608 contract stood at a loss of 1,720-1,560 yuan/mt.
On the day, sales sentiment for Shanghai copper cathode was 3.06, up 0.35 from the previous day, while procurement sentiment was 2.73, up 0.16. Historical data can be accessed in the database. In the first round of quoting, standard-quality copper brands such as Zhongjin, Zhongtiaoshan, and Tiefeng were quoted at premiums of 40-60 yuan/mt. Suppliers then lowered quotes, with Jinchuan isa, Tiefeng, Zhongtiaoshan quoted at premiums of 10-30 yuan/mt, and Lufang, JCC at premiums of 40-60 yuan/mt. High-quality copper and registered SX-EW copper supply was scarce; Jintun large plate was quoted at a premium of 120 yuan/mt, and BMK at a discount of 50 yuan/mt. In the second trading session, suppliers further reduced quotes, with some non-price-collection brands such as Zijin, Jinchuan isa Yongchang, and Xinan Tiefeng quoted at discounts of 10 yuan/mt to parity. Non-registered copper such as TFM and KFM traded at discounts of 150-120 yuan/mt.
Looking ahead to August 12, as delivery approaches, the backwardation spread is expected to widen further to above 300-400 yuan/mt, raising contract rollover costs for suppliers and increasing their willingness to sell spot copper, thereby putting significant pressure on the premium over the front-month contract. Sales and procurement sentiment improved from yesterday, but with the SHFE copper price center rising above 108,000 yuan/mt, downstream users continued to make just-in-time procurement and showed limited acceptance of high-priced cargo. Meanwhile, some standard-quality copper has already slipped to discounts of 10 yuan/mt to near parity, while discounts for non-registered copper widened further, with low-priced cargo continuing to weigh on mainstream standard-quality copper quotes. Overall, with the widening backwardation, increased selling willingness ahead of delivery, and high copper prices suppressing consumption, the quote center for spot SHFE copper against the 2608 contract is expected to shift further down, possibly moving into a discount.
