Spot quotes fell before rising last week. In the first half of the week, copper prices rose on Fed's interest rate hikes in June. Downstream orders were sluggish. Spot quotes fell to a discount of 10 yuan/mt. In the middle of the week, the market began to quote against the July contract.
Spot quotes surged as the backwardation of the SHFE front-month contract over the SHFE next-month contract widened from 200 yuan/mt to around 300 yuan/mt, boosting confidence of sellers. Tight spot supply resulting from maintenance at smelters forced downstream buyers to accept high premiums.
As of last Friday, spot premiums rose to 320 yuan/mt. According to downstream processing enterprises, they were concerned over the market outlook as high copper prices and spot premiums depressed consumption. The tight supply in Shandong will unlikely alleviate, and spot premiums can hardly fall this week.
