Price Spread Between Futures Contracts Continues to Widen, Downstream Restocking Demand Remains Sluggish, Spot Premiums Drop Significantly [[SMM] Spot Copper in South China]

SMM May 9 News:

Today, spot #1 copper cathode in Guangdong was quoted at a range of 90 yuan/mt to a premium of 220 yuan/mt against the front-month contract, with an average premium of 155 yuan/mt, down 40 yuan/mt from the previous trading day. SX-EW copper was quoted at a range of a premium of 30 yuan/mt to a premium of 50 yuan/mt, with an average premium of 40 yuan/mt, down 50 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,315 yuan/mt, up 10 yuan/mt from the previous trading day, while the average price of SX-EW copper remained unchanged from the previous trading day at 78,200 yuan/mt.

Spot Market: Guangdong's inventory has declined for three consecutive days, primarily due to reduced arrivals. Despite the continuous decline in inventory, the price spread between futures contracts has also increased simultaneously, leading to losses for downstream players in position shifting and a weak willingness to restock. Suppliers, in order to sell their goods, have had to lower prices, causing spot premiums to decline. As of 11 a.m., high-quality copper for the front-month contract was quoted at 220 yuan/mt, standard-quality copper at 90 yuan/mt, and SX-EW copper at a premium of 40 yuan/mt. Attention should be paid to whether the price spread between futures contracts will continue to widen next week.

Overall, with the price spread between futures contracts continuing to widen and the weak willingness of downstream players to restock, spot premiums have significantly declined.

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