Price Spread Between Futures Contracts Continued to Narrow, Suppliers Actively Sold Off Stocks and Premiums Declined [SMM SHFE Copper Spot]

Published: Mar 21, 2025 13:51

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[Shanghai Spot Copper] During the day, mainstream standard-quality copper was quoted at a discount of 40 to 10 yuan/mt against the front-month contract, while high-quality copper was quoted at a discount of 10 to a premium of 10 yuan/mt. The price spread between futures contracts continued to narrow, with the structure of SHFE copper 2404 contract versus 2405 contract rapidly shifting towards Back. In the spot market, the price difference between standard-quality copper and hydrometallurgical or unregistered copper significantly narrowed. Initial expectations of tight supply were realized, and it is expected that domestic social inventory will continue to decline by the end of this week. It is anticipated that premiums will return above parity next week.

SMM March 21 News: Today, #1 copper cathode spot prices against the current month 2504 contract were at a discount of 40 yuan/mt to a premium of 10 yuan/mt, with the average price at a discount of 15 yuan/mt, down 15 yuan/mt from the previous trading day; standard-quality copper traded at 81,330-81,690 yuan/mt, and high-quality copper traded at 81,360-81,710 yuan/mt. SHFE copper 2504 contract jumped initially and then pulled back in the morning session, peaking at 81,740 yuan/mt before sharply declining, falling below 81,000 yuan/mt by the end of the morning session. The price spread between the SHFE copper 2504 and 2505 contracts narrowed from C120-150 yuan/mt to C10-50 yuan/mt. Spot premiums started high and declined during the day as a large number of warrants were released, impacting the spot market. At the beginning of the session, suppliers quoted mainstream standard-quality copper at a discount of 30 yuan/mt to a premium of 10 yuan/mt, and high-quality copper at a discount of 10 yuan/mt to a premium of 20 yuan/mt. As the futures market declined, downstream demand improved, and the sentiment for weekend inventory restocking increased slightly. During the main trading period, mainstream standard-quality copper traded at a discount of 40 yuan/mt to parity, and high-quality copper traded at a discount of 10 yuan/mt to a premium of 10 yuan/mt. SX-EW copper traded at a discount of 70 yuan/mt, with almost no price difference compared to mainstream standard-quality copper. By 11 am, market quotes stabilized, and overall transactions slowed. The price spread between the SHFE copper 2404 and 2405 contracts continued to narrow, with the structure rapidly shifting towards Back. In the spot market, the price difference between standard-quality copper, SX-EW copper, and non-registered copper significantly narrowed, and the initial expectations of tight supply began to materialize. It is expected that domestic social inventory will continue to decline this weekend, and premiums are likely to return above parity next week.

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