Supplier Sell-Offs and Downstream Counteroffers, Shanghai Spot Copper Discounts Came Under Pressure [SMM Shanghai Spot Copper]

SMM, March 24:

In the morning session, the SHFE copper 2604 contract fell before stabilizing and then fluctuate rangebound. It opened at 94,720 yuan/mt, then continued to fall to 93,880 yuan/mt after the open. Prices subsequently stabilized somewhat and fluctuated between 93,770 yuan/mt and 94,270 yuan/mt, with the closing price at 94,010 yuan/mt. The price spread between futures contracts for adjacent months was between Contango 50 yuan/mt and Backwardation 10 yuan/mt, while the import profit margin for the front-month SHFE copper contract ranged from a profit of 70 yuan/mt to a profit of 200 yuan/mt.

Intraday, sales sentiment for copper cathode in Shanghai was 2.75, down 0.03 MoM, while procurement sentiment was 2.59, down 0.06 MoM. . At the start of morning trading, suppliers quoted spot discounts of 80 yuan/mt to 50 yuan/mt for standard-quality copper, among which JCC and Lufang were quoted at discounts of 50 yuan/mt to 40 yuan/mt, while Tiefeng, Jinfeng, Zijin, Honglu, and Dajiang HS were quoted at discounts of 80 yuan/mt to 70 yuan/mt, and ex-works cargoes such as Jinguan, Jinxin, Jinfeng, Tongguan, and Jintun pc were quoted at discounts of 50 yuan/mt to 40 yuan/mt; high-quality copper such as Guixi, Jinchuan (plate), and Jintun plate was quoted at discounts of 20 yuan/mt to parity. Subsequently, some suppliers engaged in sell-offs, dragging overall market premiums lower, with Honglu and Tiefeng quoted at discounts of 120 yuan/mt to 100 yuan/mt. Entering the second trading period, suppliers cut prices further. Standard-quality copper such as Tiefeng, Zijin, Honglu, and Zhongjin was successively traded at quoted discounts of 130 yuan/mt to 100 yuan/mt, while Lufang, Xiangguang, and JCC traded at discounts of 70 yuan/mt to 60 yuan/mt. Jinguan, Jinxin, and Jintun pc were successively traded at quoted discounts of 80 yuan/mt to 60 yuan/mt.

Copper prices were somewhat higher than yesterday, but both purchasing and sales sentiment pulled back intraday, indicating that downstream acceptance of current price levels remained limited. From the market structure, under the current nearby-month spread structure, suppliers showed strong willingness to sell, and some engaged in sell-offs, driving overall spot discounts sharply lower, while downstream bargaining willingness was relatively evident. In the second trading period, after premiums were cut further, market transactions improved somewhat, but downstream procurement remained generally cautious, mostly focused on restocking on price dips, with insufficient willingness to chase higher prices. Overall, amid the tug-of-war between active selling by suppliers and cautious downstream procurement, Shanghai spot copper discounts were expected to remain under pressure tomorrow.