Suppliers Show Low Willingness to Sell, Weak Supply and Demand Push Premiums Slightly Higher [SMM Shanghai Spot Copper]

SMM, February 20:

Today, #1 copper cathode spot prices against the SHFE 2503 contract were quoted at a discount of 110-70 yuan/mt, with an average discount of 90 yuan/mt, up 20 yuan/mt from the previous trading day. Standard-quality copper traded at 77,040-77,250 yuan/mt, while high-quality copper traded at 77,060-77,270 yuan/mt. The SHFE copper 2503 contract showed a staged increase during the morning session, fluctuating around 77,200 yuan/mt at the opening and peaking near 77,330 yuan/mt in the second session. The price spread between the SHFE copper 2503 and 2504 contracts fluctuated at C160-C190 yuan/mt.

Due to the widening of the contango structure during the day, suppliers reduced spot trading, leading to a slight increase in spot premiums. At the opening, mainstream standard-quality copper was quoted at a discount of 100-80 yuan/mt, while high-quality copper was quoted at a discount of 80-70 yuan/mt. Given the recent poor market transactions, some suppliers were reluctant to release their warehouse warrants, reducing spot market liquidity and resulting in weak supply and demand. During the main trading session, prices slightly declined, with mainstream standard-quality copper trading at a discount of 110-90 yuan/mt and high-quality copper trading at a discount of 90-70 yuan/mt. Hydro copper saw limited transactions at a discount of around 180 yuan/mt. By 11:00 a.m., spot premiums stabilized.

According to SMM, a slight inventory buildup continued in the Shanghai region this week. Due to the ongoing expansion of import losses, active customs clearance of imports is expected to decrease in the near term. Meanwhile, smelters have started planning for exports, which is expected to support spot premiums in the future.