The Inter-Month Price Spread First Showed a Backwardation Structure, and Shanghai Spot Copper Discounts Continued to Remain Under Pressure [SMM Shanghai Spot Copper]

SMM News, March 18:

In the morning session, the SHFE copper 2604 contract fluctuated repeatedly between gains and pullbacks, with the closing price hitting an intraday low. It opened at 99,200 yuan/mt, then rose to a high of 99,450 yuan/mt before pulling back to 98,870 yuan/mt. Prices then stabilized and rose slightly to 99,250 yuan/mt, before falling again to an intraday low of 98,660 yuan/mt by the close. The price spread between futures contracts moved between a Contango of 50 yuan/mt and a Backwardation of 10 yuan/mt, while the import profit margin for the SHFE copper front-month contract ranged from a profit of 20 yuan/mt to a profit of 100 yuan/mt.

Intraday, sales sentiment for copper cathode in Shanghai was 2.73, up 0.09 MoM, while purchasing sentiment was 2.65, up 0.1 MoM. . At the start of morning trading, suppliers quoted standard-quality copper at discounts of 140 yuan/mt to 40 yuan/mt, with Peru plate, JCC, Lufang and others quoted at discounts of 60 yuan/mt to 40 yuan/mt, while Zhongjin, Tiefeng, Zijin, Jinguan, Jinxin, Jinfeng, and Jinchuan Isa Yongchang were quoted at discounts of 140 yuan/mt to 60 yuan/mt; high-quality copper such as Guixi and Jinchuan (plate) was quoted at discounts of 40 yuan/mt to 20 yuan/mt; non-registered copper was quoted at discounts of 220 yuan/mt to 200 yuan/mt. Entering the second trading period, suppliers lowered prices further, with Lufang, Xiangguang, JCC and others quoted at discounts of 80 yuan/mt to 70 yuan/mt, Peru plate traded at a discount of 80 yuan/mt, Tongguan, Jinfeng and others were successively traded at discounts of 80 yuan/mt to 60 yuan/mt, while Zijin, Honglu and others traded at discounts of 140 yuan/mt to 120 yuan/mt; non-registered copper traded at around discounts of 240 yuan/mt to 220 yuan/mt.

Intraday trading in the spot market improved somewhat from yesterday. Suppliers still showed willingness to hold prices firm, but some suppliers’ sell-offs temporarily pressured the market, causing spot premiums to weaken somewhat in the second trading period. In addition, as the inter-month Contango narrowed, suppliers’ willingness to ship to delivery warehouses weakened somewhat, and spot premiums remained under pressure. Demand side, as copper prices fell, downstream enterprises may have had some restocking demand, but the actual appeal of current copper prices remained limited. Supply side, social inventory remained high, but actually circulating cargo was relatively tight, and some warrants had already flowed out during the day, which may ease some pressure on spot supply. At the same time, the import window remained open, and expectations for subsequent inflows of cargo from outside China increased. Overall, amid the tug-of-war between sellers and buyers, Shanghai spot copper is expected to maintain the current discount structure overall tomorrow.