SMM, October 14:
Today, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at a discount of 60 yuan/mt to a premium of 100 yuan/mt, with an average of a discount of 50 yuan/mt, down 70 yuan/mt from the previous trading day. In early trading, the SHFE copper 2610 contract opened higher with a gap, then dipped before rebounding, retreating after a rapid rise intraday. It opened near 111,450 yuan/mt, briefly rose to around 111,550 yuan/mt, then drifted lower, touching an intraday low near 111,350 yuan/mt. Copper prices then gradually rebounded, with gains accelerating after breaking above 111,600 yuan/mt, reaching an intraday high near 112,000 yuan/mt before pulling back quickly from highs, closing the morning session at 111,750 yuan/mt. The backwardation spread between front-month and next-month contracts was between 480 yuan/mt and 690 yuan/mt, and the import profit margin for SHFE copper against the 2610 front-month contract was between a loss of 1,090 yuan/mt and a loss of 730 yuan/mt.
Intraday, selling sentiment for copper cathode in the Shanghai region was 3.07, down 0.50 MoM, and purchasing sentiment was 2.77, down 0.14 MoM. Historical data can be queried in the database. At the start of early trading, suppliers initially quoted standard-quality copper at a discount of 50 yuan/mt to a premium of 10 yuan/mt, and non-registered copper at a discount of 250 yuan/mt to a discount of 200 yuan/mt. Subsequently, suppliers lowered quotes continuously, with Zhongtiaoshan, Jintong Yusheng, and Dajiang HS quoted at a discount of 120 yuan/mt. High-quality copper such as Jinchuan plate and Jintun plate was quoted at parity. SX-EW copper from Myanmar was quoted at a discount of 200 yuan/mt, and non-registered copper was quoted at a discount of 300 yuan/mt to a discount of 200 yuan/mt. Entering the second session, after some low-priced cargoes were traded, standard-quality copper quotes were mostly around a discount of 100 yuan/mt to a discount of 50 yuan/mt.
Looking ahead to tomorrow, tomorrow is the last trading day for the SHFE copper 2610 contract. Since SMM spot quotes are still based on the front-month contract, as delivery and contract rollover approach, changes in the price spread between the 2610 and 2611 contracts will directly affect spot premiums. Intraday, the backwardation between front-month and next-month contracts has narrowed significantly from earlier highs. If the spread pulls back further, after conversion based on the spread structure, spot premiums against the 2610 contract are expected to remain near parity tomorrow, with a possibility of a slight rebound. Some suppliers have already started quoting against the 2611 contract in advance, with non-registered copper quoted at a premium of around 400 yuan/mt against the 2611 contract. Supply-demand side, recent arrivals of domestic cargoes remain relatively limited, while downstream processing enterprises are also purchasing mainly on a need-to basis, leaving the market in a supply-demand weak pattern overall. Considering tomorrow marks a critical period for delivery, spot market trading is expected to revolve more around spreads and post-rollover quotes, with close attention needed on open interest in the 2610 contract, warrants, and rapid changes in the backwardation spread between front-month and next-month contracts.
