Wider price spread between futures contracts, sluggish downstream restocking; spot premiums jump initially and then pull back [[SMM] Spot Copper in South China]

SMM May 7 News:

Today in Guangdong, spot prices for #1 copper cathode against the front-month contract were quoted at a range of 160 yuan/mt to a premium of 280 yuan/mt, with an average premium of 220 yuan/mt, up 40 yuan/mt from the previous trading day. SX-EW copper was quoted at a premium of 100 yuan/mt to 120 yuan/mt, with an average premium of 110 yuan/mt, up 30 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,600 yuan/mt, up 585 yuan/mt from the previous trading day, while the average price of SX-EW copper was 78,490 yuan/mt, up 575 yuan/mt from the previous trading day.

Spot Market: Guangdong's inventory fell again after increasing for just one day, and attention will be paid to whether it will continue to decrease in the future. Stimulated by this, suppliers did not pay attention to the rising copper prices today and actively stood firm on quotes to sell. In the morning session, standard-quality copper was once quoted at a premium of 180 yuan/mt. However, downstream buyers were unwilling to rush to buy amid continuous price rise and only maintained purchasing as needed. Suppliers had to lower their premiums to sell. In addition, the significant widening of the price spread between futures contracts also discouraged buyers from purchasing more. As of 11 a.m., high-quality copper for the front-month contract was quoted at 280 yuan/mt, standard-quality copper at 170 yuan/mt, and SX-EW copper at a premium of 110 yuan/mt.

Overall, with the widening of the price spread between futures contracts, downstream buyers were not active in restocking, and spot premiums jumped initially and then pulled back.

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