Price spread between futures contracts continues to widen, downstream players reluctant to replenish inventory; suppliers can only sell at reduced prices [[SMM Spot Copper in South China]]

SMM, May 7:

Today, spot #1 copper cathode in Guangdong was quoted at a premium of 140 yuan/mt to 250 yuan/mt against the front-month contract, with an average premium of 195 yuan/mt, down 25 yuan/mt from the previous trading day. SX-EW copper was quoted at a premium of 80 yuan/mt to 100 yuan/mt, with an average premium of 90 yuan/mt, down 20 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,305 yuan/mt, down 295 yuan/mt from the previous trading day, while the average price of SX-EW copper was 78,200 yuan/mt, down 290 yuan/mt from the previous trading day.

Spot market: Inventory in Guangdong has declined for two consecutive days, primarily due to reduced arrivals. Despite the decline in both inventory and copper prices, suppliers did not continue to stand firm on quotes but instead adjusted prices downward to facilitate sales. This is because the current price spread between futures contracts has widened to nearly 500 yuan/mt. As a result, downstream procurement interest is low, and suppliers have no choice but to lower prices to move inventory. As of 11 a.m., high-quality copper for the front-month contract was quoted at 240 yuan/mt, standard-quality copper at 130 yuan/mt, and SX-EW copper at a premium of 80 yuan/mt.

Overall, with the price spread between futures contracts continuing to widen, downstream players are reluctant to replenish inventory, forcing suppliers to lower prices to facilitate sales. Overall trading activity is weaker than yesterday.

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