Tight Bill Availability Combined with Month-End Reluctance to Sell, Downstream Pre-Holiday Stockpiling Supported Spot Premiums [SMM Shanghai Spot Copper]

SMM April 27:

In the morning session, SHFE copper 2605 opened with a gap up and then retreated after rapid rises multiple times, showing an overall weak upward trend. The opening price was 102,700 yuan/mt. After opening, prices jumped to 103,000 yuan/mt before pulling back to a low of 102,620 yuan/mt. Prices then rose again, trading between 102,700 yuan/mt and 103,000 yuan/mt, before climbing further to a high of 103,170 yuan/mt. By the close, prices had pulled back somewhat, with the closing price at 103,070 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 160 yuan/mt to 110 yuan/mt. The import profit margin for Shanghai spot copper against the 2605 contract ranged from a loss of 320 yuan/mt to a loss of 230 yuan/mt.

During the day, buying and selling sentiment for copper cathode in Shanghai rebounded. The selling sentiment was 2.74, up 0.12 MoM, and the buying sentiment was 2.78, up 0.29 MoM.. In the early morning session, suppliers offered standard-quality copper such as Lufang and JCC at a premium of 30-50 yuan/mt, while Zhongtiaoshan, Tiefeng, Jinfeng, Jintong Yusheng, Dajiang HS, and Jinchuan ISA Yongchang were offered with cargoes with invoices dated next month at a discount of 20 yuan/mt to a premium of 10 yuan/mt. High-quality copper such as Guixi and Jinchuan (plate) were quoted with cargoes with invoices dated next month at a premium of 40-50 yuan/mt. In the second trading session, low-priced cargoes were hard to find in the market. Jinguan, Jintun PC, Jinfeng, and Jinxin were quoted with long-term pickup cargoes with invoices dated this month at a premium of 50-60 yuan/mt. Dajiang PC, Tiefeng, and Jintong Yusheng were quoted with cargoes with invoices dated next month at a discount of 10 yuan/mt to parity. High-quality copper Jintun plate was quoted with cargoes with invoices dated this month at a factory-pickup premium of 80 yuan/mt.

Invoice structure side, the tight supply of cargoes with invoices dated this month in the Shanghai spot copper market showed no signs of easing. Suppliers generally raised their quotes for cargoes with invoices dated this month, and low-priced cargoes were hard to find. Some downstream enterprises, to ensure invoice issuance for the current month, preferred to purchase directly from smelters, diverting some demand away from the spot trading market. Supplier behavior side, with month-end settlement approaching, some suppliers showed low enthusiasm for shipments and held back from selling, further tightening available cargoes. Demand side, the Labour Day holiday falls next week, and downstream enterprises have pre-holiday stockpiling needs. Procurement may see some increase, and the preference for cargoes with invoices dated this month will intensify the structural tightness in the spot market. Overall, driven by the combined effects of invoice scarcity, suppliers holding back from selling, and pre-holiday stockpiling, Shanghai spot copper prices against the 2605 contract are expected to maintain a premium tomorrow, continuing the overall firm trend.