The Inventory Buildup Has Significantly Slowed Down, and the Spot Market Awaits Destocking Signals [SMM Shanghai Spot Copper]

SMM News on February 21:

Today, #1 copper cathode spot prices against the SHFE 2503 contract were quoted at a discount of 130-80 yuan/mt, with an average price at a discount of 105 yuan/mt, up 5 yuan/mt from the previous trading day. Standard-quality copper was traded at 76,980-77,210 yuan/mt, and high-quality copper at 76,990-77,250 yuan/mt. The SHFE copper 2503 contract opened lower in the morning and then moved higher. It initially tested 77,060 yuan/mt before fluctuating upward, peaking at 77,350 yuan/mt during the session. Before the end of the morning session, it fluctuated around 77,250 yuan/mt. The price spread between the SHFE copper 2503 and 2504 contracts fluctuated at C150-C170 yuan/mt.

Spot premiums rose slightly in the early session, remaining generally consistent with last Friday. At the beginning of the session, suppliers quoted mainstream standard-quality copper at a discount of 120-100 yuan/mt, and high-quality copper at a discount of 110-80 yuan/mt. Market sentiment was similar to last Friday. During the main trading session, mainstream standard-quality copper was quoted at a discount of 130-120 yuan/mt, with transactions concluded, while high-quality copper was quoted at a discount of 120-90 yuan/mt, with transactions concluded. Hydro copper was traded in small volumes at a discount of around 200 yuan/mt. By 11 a.m., mainstream standard-quality copper was quoted at a discount of 140-120 yuan/mt, with limited transactions, and high-quality copper at a discount of 120-100 yuan/mt, with transactions concluded.

Limited import arrivals during the week and a significant slowdown in social inventory buildup have been observed. The market is expected to see a recovery in downstream domestic consumption in March, stabilizing spot premiums. Spot premiums are expected to be more likely to rise than fall tomorrow.