Last week, spot quotes fell before rallying. Due to the Chinese Dragon Boat Festival holidays, there was an accumulation of finished product inventory at smelters. After the holidays, smelters liquidated stocks at lower prices, lowering spot premiums in Shandong to zero.  Meanwhile, buying on the dip drove large volumes of sales at some smelters, resulting in tight supply in the second half of the week.

As such, sellers raised prices. Spot premiums rebounded to 180 yuan/mt even as month-end and mid-year settlement depressed downstream buying interest.

This week, the price spread between the SHFE front-month and SHFE next-month copper contracts will continue to expand. And the supply in Shandong has not recovered. Local spot quotes will rise slightly this week.