Slight retreat in copper prices supports widening of price spread between futures contracts, while spot premiums are under pressure [[SMM Shanghai spot copper]]

Published: May 8, 2025 12:30

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[SMM Spot Copper] According to SMM data, copper inventories in the Shanghai region decreased by 3,200 mt from Tuesday to 86,400 mt. The continuous decline in inventories has supported spot premiums. However, as the delivery date approaches, the willingness of bears/shorts to drive down prices and purchase copper will emerge. Additionally, the widening of the price spread between futures contracts will further suppress spot premiums. It is expected that spot premiums will continue to decline tomorrow.

SMM News on May 8:

Today, SMM #1 copper cathode spot premiums against the front-month 2505 contract were reported at a range of 190-260 yuan/mt, with an average premium of 225 yuan/mt, down 35 yuan/mt from the previous trading day. The SMM #1 copper cathode price was 78,290-78,580 yuan/mt. In the morning session, the SHFE copper front-month contract showed a reduction in open interest and rose steadily from 78,000 yuan/mt to above 78,300 yuan/mt, closing at 78,300 yuan/mt. The price spread between futures contracts fluctuated within a range of BACK 430-470 yuan/mt. Spot imports have achieved a profit of nearly 100 yuan/mt, while the import loss for SHFE copper front-month contracts narrowed to 250 yuan/mt.

During the day, due to the widening of the price spread between futures contracts, spot arbitrageurs actively offered spot cargo and, as the delivery date approached, sold at lower prices due to concerns about a decline in premiums. According to SMM data, the sentiment index for suppliers' selling of copper cathode in the Shanghai area was 3.07, and the sentiment index for purchases was 3.61, up 0.14 and 0.07, respectively, from yesterday. In the early morning session, suppliers quoted premiums of 220-240 yuan/mt for JCC, Polish plates, etc.; premiums for Jinchuan (plate) were 260 yuan/mt, and premiums for Guixi and CCC-P were 280 yuan/mt. Subsequently, transactions were mainly for Zhongtiaoshan, Tiefeng, imported Jinguan, and Dajiang pc, with transaction prices in the range of 200-230 yuan/mt. Entering the second trading session, the futures market declined, and the price spread between futures contracts continued to hover around BACK 450 yuan/mt. Suppliers continued to lower premiums, with low-priced imported Jinguan transactions closing at around 160 yuan/mt, and premiums for Zhongtiaoshan pc and Tiefeng at around 180 yuan/mt. Non-registered cargo premiums were transacted at 130-150 yuan/mt, showing a tight supply.

According to SMM data, inventory in the Shanghai area decreased by 3,200 mt from Tuesday to 86,400 mt. Although the continuous decline in inventory supports spot premiums, as the delivery date approaches, the willingness of bears/shorts to drive down prices through purchases will emerge, and the widening of the price spread between futures contracts will further suppress spot premiums. It is expected that spot premiums will continue to decline tomorrow.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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