SMM June 17:
In early trading, the SHFE copper 2607 contract moved sideways before retreating after a rapid rise. It opened at 105,200 yuan/mt, edged down after the open to touch a low of 105,040 yuan/mt, then fluctuated between 105,050 yuan/mt and 105,240 yuan/mt, subsequently rose to a high of 105,570 yuan/mt, and then pulled back slightly to close at 105,450 yuan/mt. The Contango spread between inter-month contracts ranged from 110 yuan/mt to 70 yuan/mt. The import profit margin of SHFE copper against the 2607 contract for the current month was between a loss of 320 yuan/mt and a loss of 270 yuan/mt.
During the day, sales sentiment for copper cathode in Shanghai was 2.71, up 0.07 MoM, and purchase sentiment was 2.61, up 0.06 MoM. Historical data can be queried in the database. At the market open in the morning, in the first round of offers, suppliers quoted standard-quality copper at par to a 10 yuan/mt premium, with brands like JCC, Lufang, Xiangguang offering a 10 yuan/mt premium, while Zhongtiaoshan, Tiefeng, Yuguang, Dajiang PC, etc. quoted at parity. Subsequently, suppliers quickly lowered their quotes: Tiefeng, Zhongtiaoshan, Dajiang PC, etc. quoted discounts of 20 yuan/mt; Jinguan, Jinxin, Jintun PC, Jinfeng quoted EXW premiums of 30 yuan/mt. For high-quality copper, Guixi and Jintun large plates offered premiums of 50-60 yuan/mt. Registered SX-EW copper such as ESOX and BMKMOOK quoted discounts of 40-30 yuan/mt. In the second trading session, transactions were sluggish. Suppliers slightly lowered their quotes, with Lufang, Xiangguang, JCC, etc. offering premiums at par. Non-registered copper traded at discounts of 270-150 yuan/mt.
Tomorrow, with copper prices edging up today, although buying and selling sentiment rebounded, overall sentiment remained weak. Suppliers initially quoted at parity to a 10 yuan/mt premium in the morning, but actual transactions were sluggish, and they had to continuously cut quotes to around a 20 yuan/mt discount in the second session to secure deals, reflecting downstream’s limited acceptance of current copper prices and lack of willingness to chase higher prices. The Contango spread between inter-month contracts widened slightly but remained around 100 yuan/mt, with suppliers showing strong inclination to hold prices firm. Key attention should be paid to the outflow of warrants tomorrow. If there is a concentrated release, it will suppress spot premiums; if the outflow is limited, supported by the spread structure, there will be limited room for discounts to widen further. Overall, amid the tug-of-war between weak demand and uncertainty over warrant outflows, spot SHFE copper against the 2607 contract is expected to maintain current levels.
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