SMM Weekly Price Outlook for Base Metals on LME and SHFE (Aug. 14-18, 2017)

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the Shanghai spot copper market is expected to continue its relatively strong trend. From a regional structure perspective, available spot cargo in Jiangsu remains tight, with some downstream enterprises facing difficulties in procurement, providing strong support for spot premiums. From a market structure perspective, the inter-month Contango price spread between futures contracts has widened further, and suppliers have shown a stronger willingness to hold positions for delivery under the contango structure, with low willingness to sell at lower prices and strong sentiment to hold prices firm. Demand side, although downstream procurement has become more cautious following the pullback in copper prices, rigid restocking demand persists. Overall, supported by the combined effects of tight regional supply and the price spread structure, spot prices against the SHFE copper 2604 contract are expected to maintain current levels tomorrow.

Spot copper premiums in Shandong remained stable this week, with overall market trading sentiment being subdued. As of Thursday, the average spot premiums in Shandong were quoted at a discount of 110 yuan/mt.

Copper futures trading volume dropped sharply, signaling reduced participation and cautious sentiment.