SMM August 12:
In early trading, the SHFE copper 2608 contract gapped higher at the open and then consolidated sideways, with the overall center first declining and then rising. The opening price was 108,350 yuan/mt. After opening, the price climbed to 108,590 yuan/mt before starting to decline, dipping to an intraday low of 108,360 yuan/mt. After stabilizing, the price rose, reaching an intraday high of 108,770 yuan/mt, before undergoing a slight correction towards the close, with a closing price of 108,680 yuan/mt. The backwardation spread between the next-month and front-month contracts ranged from 380 yuan/mt to 450 yuan/mt. The front-month import profit margin of SHFE copper against the 2608 contract ranged from a loss of 1,820 yuan/mt to a loss of 1,740 yuan/mt.
During the day, sales sentiment for Shanghai copper cathode stood at 3.16, up 0.10 MoM, while purchasing sentiment was 2.87, up 0.14 MoM. Historical data can be queried in the database. During the day, suppliers quickly lowered their quotes multiple times to facilitate transactions. Standard-quality copper such as Lufang and JCC were initially quoted at premiums of 50 yuan/mt in early trading and then lowered to discounts of around 20 yuan/mt. Tiefeng, Zhongjin, Zhongtiaoshan, Yuguang, and others went from parity to discounts of around 80 yuan/mt. High-quality copper was scarce, with only some Guixi circulating, trading at premiums of 80 yuan/mt or SMM average price +30 yuan/mt. Non-registered copper saw active trading, with TFM, KFM, KCC, etc., basically traded at discounts ranging from 250 yuan/mt to 180 yuan/mt.
Looking ahead to tomorrow, approaching delivery, the backwardation spread between next-month and front-month contracts is expected to widen further, and the cost of rolling over positions to the next month for some suppliers has risen significantly, enhancing their willingness to sell spot cargo. This pushed mainstream standard-quality copper quotes rapidly down into discount territory. Meanwhile, against the backdrop of relatively strong front-month contract prices, some materials meeting delivery standards had the incentive to be converted into warrants, leading to a divergence in spot material flows. As of August 11, SHFE copper registered warrants were about 23,200 mt. As of the early close on August 12, the open interest in the SHFE copper 2608 contract remained around 23,000 lots. The pace of open interest pullback and warrant changes before delivery warrants continued close attention. Demand side, end-use consumption remained sluggish, with downstream procurement still need-based. Low-priced non-registered copper traded actively on its price advantage but has yet to significantly improve overall purchasing. In summary, under the combined impact of widening backwardation, increased supplier willingness to sell, and weak end-use demand, SHFE copper spot prices against the 2608 contract are expected to remain under pressure tomorrow, with spot possibly staying at a discount.
