Price spread between futures contracts remains wide near delivery month, suppliers proactively cut prices to sell [SMM South China spot copper]

SMM, October 12:

Today in Guangdong, #1 copper cathode spot against the front-month contract: high-quality copper was quoted at a premium of 350 yuan/mt, down 250 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 50 yuan/mt, down 250 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 10 yuan/mt, down 250 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 111,945 yuan/mt, up 745 yuan/mt from the previous trading day, while the average price of SX-EW copper was 111,735 yuan/mt, up 745 yuan/mt from the previous trading day.

Spot market: After the weekend, Guangdong inventory declined again, mainly due to reduced arrivals and increased warehouse withdrawals. With delivery approaching but the price spread between futures contracts still very wide, and copper prices rising notably today, suppliers had to lower prices to sell. Downstream users only slightly increased procurement volumes. Overall, transactions today were only slightly better than last Friday. Today, the procurement sentiment for copper cathode in Guangdong was 2.73, up 0.1 from the previous trading day, while the shipment sentiment was 2.99, up 0.03 from the previous trading day (historical data can be queried in the database).

Overall, with delivery approaching and the price spread between futures contracts still wide, suppliers actively lowered prices to sell, and spot premiums fell notably.