Early-Month Demand Recovery Failed to Overcome High-Price Suppression, Shanghai Spot Copper Premiums Rose Then Fell [SMM Shanghai Spot Copper]

SMM June 1 update:

Today, SMM #1 copper cathode spot prices against the SHFE copper 2606 contract were quoted at a discount of 120 yuan/mt to parity, with an average quote at a discount of 60 yuan/mt. In the morning session, the SHFE copper 2606 contract retreated after a rapid rise. The opening price was 104,070 yuan/mt. After the open, prices edged down, dipping to 104,410 yuan/mt, before stabilizing and starting to rise, touching a high of 104,980 yuan/mt. Prices then pulled back slightly, with the closing price at 104,750 yuan/mt. The inter-month Contango price spread ranged from 120 yuan/mt to 40 yuan/mt. The import profit margin for SHFE copper against the 2606 contract ranged from a loss of 410 yuan/mt to a loss of 320 yuan/mt.

During the day, the selling sentiment for copper cathode in Shanghai was 2.72, up 0.17 MoM, and the purchasing sentiment was 2.64, up 0.13 MoM. Historical data can be found in the database. At the start of the morning session, suppliers quoted standard-quality copper at a discount of 80 yuan/mt to a discount of 40 yuan/mt, with Lufang, Xiangguang, and JCC quoted at a discount of 40 yuan/mt, and Tiefeng, Zhongtiaoshan, Jinfeng, Zijin, OLYDA, and Dajiang HS quoted at a discount of 80 yuan/mt to a discount of 60 yuan/mt. Suppliers then quickly lowered their quotes, with standard-quality Lufang, Xiangguang, and JCC quoted at a discount of 80 yuan/mt to a discount of 70 yuan/mt, and Jinguan, Jinxin, Jintun PC, and Jinfeng quoted at a discount of 60 yuan/mt for cargoes with invoices dated this month on an ex-factory basis. High-quality copper was scarce, with Guixi and Jintun large plates quoted at a premium of 10 yuan/mt. Entering the second session, suppliers further lowered prices. Standard-quality copper from Zhongtiaoshan, Tiefeng, and Zijin was successively traded at a discount of 120 yuan/mt to a discount of 100 yuan/mt. Jinguan, Jinxin, and Jintun PC were successively traded at a discount of 100 yuan/mt to a discount of 80 yuan/mt on an ex-factory basis. Tongguan was successively traded at a discount of 60 yuan/mt to a discount of 50 yuan/mt on an ex-factory basis. Non-registered copper was successively traded at a discount of 270 yuan/mt to a discount of 240 yuan/mt for cargoes with invoices dated next month.

Looking ahead to tomorrow, a new monthly procurement cycle is expected to begin, and downstream restocking demand is expected to see some release, with suppliers raising quotes significantly in response. From the market performance perspective, as copper prices remain at a relatively high level, downstream enterprises' willingness to chase higher prices remains limited after suppliers raised quotes. Some transactions were concluded after consecutive quote reductions, with both the willingness to hold prices firm and to lower prices for shipments coexisting. Overall, amid the tug-of-war between partial release of early-month procurement demand and high-price suppression, Shanghai spot copper prices against the 2606 contract are expected to remain at a discount tomorrow.