SMM News, March 19:
In the morning session, the SHFE copper 2604 contract fell before stabilizing and then fluctuated rangebound. It opened at 96,100 yuan/mt and continued to decline after the opening, hitting a low of 95,430 yuan/mt. Prices then stabilized and fluctuated between 95,550 yuan/mt and 95,820 yuan/mt, with the closing price at 95,680 yuan/mt. The backwardation price spread between futures contracts for adjacent months was between 40 yuan/mt and 80 yuan/mt, while the import profit margin for the SHFE copper front-month contract ranged from a profit of 80 yuan/mt to a profit of 200 yuan/mt.
During the day, sales sentiment for copper cathode in Shanghai was 3.02, up 0.29 MoM, while purchase willingness was 2.94, up 0.29 MoM.. At the start of morning trading, as copper prices fell, suppliers showed strong sentiment to hold prices firm. Quotations for standard-quality copper were at discounts of 30 yuan/mt to parity, with some JCC and Lufang traded at parity. Zhongtiaoshan, Jinguan, Tiefeng, Jinfeng, Zijin, and OLYDA were quoted at discounts of 30 yuan/mt to parity. High-quality copper such as Guixi and Jinchuan (plate) was quoted at premiums of 30 yuan/mt to 50 yuan/mt. Non-registered copper was quoted at discounts of 60 yuan/mt to 50 yuan/mt. Later, suppliers sharply lowered prices. Standard-quality copper such as Xiangguang, JCC, and Lufang was quoted at discounts of 40 yuan/mt to 20 yuan/mt, while Tiefeng, Zijin, OLYDA, and Dajiang HS were quoted at discounts of 80 yuan/mt to 50 yuan/mt. High-quality copper such as Guixi and Jinchuan (plate) was quoted at discounts of 30 yuan/mt to 10 yuan/mt. Entering the second trading period, suppliers further lowered prices. Lufang, Xiangguang, and JCC were quoted at discounts of 70 yuan/mt to 20 yuan/mt, while Tiefeng and OLYDA were successively traded at discounts of 90 yuan/mt to 80 yuan/mt. Registered SX-EW copper was scarce, with only some Myanmar cargoes circulating, and was successively traded at a discount of 110 yuan/mt.
During the day, the SHFE copper 2604 contract extended its decline, with the trading range further moving down to 95,500-96,000 yuan/mt. The center of copper prices continued to move lower, significantly stimulating downstream enterprises' demand to buy the dip and restock, and trading sentiment in the spot market recovered notably. On the demand side, according to SMM, most downstream enterprises saw a surge in order volumes, marking a substantial increase from the previous period, while end-user cargo pick-up also increased in tandem. The pullback in copper prices became more attractive to enterprises, and willingness to buy the dip was strong. Suppliers held prices firm accordingly, driving a clear rebound in spot premiums in early trading. On the supply side, social inventory destocked sharply by 24,200 mt from Monday, with the pace of destocking accelerating. The rebound in spot premiums increased suppliers' willingness to sell, and more warrants flowed into the market. As premiums reached the psychological expectations of some suppliers, the selling of spot warrants began to emerge, easing the previously tight spot supply situation and causing spot premiums to decline afterward. Overall, current copper prices became more attractive to downstream enterprises, and faster destocking supported spot copper. However, suppliers' selling on price strength, together with changes in the price spread structure between futures contracts, put pressure on premiums. Amid the tug-of-war between sellers and buyers, Shanghai spot copper was expected to remain in a contested pattern tomorrow, with premiums likely to stay in discount territory.
