Countdown to Delivery: Domestic Deliverable Supply's Discount Narrows [SMM Shanghai Spot Copper]

SMM News on May 13:

       Today, the spot prices of SMM #1 copper cathode against the current-month 2505 contract were reported at a discount of 40 yuan/mt to a premium of 20 yuan/mt, with an average price at a discount of 10 yuan/mt, an increase of 5 yuan/mt from the previous trading day. The SMM #1 copper cathode price range was 78,090-78,220 yuan/mt. In the morning session, the SHFE copper 2505 contract slipped from 78,350 yuan/mt and fluctuated near 78,160 yuan/mt, briefly touching 78,240 yuan/mt before the morning close. The inter-month BACK price spread fluctuated within 360-400 yuan/mt. The import loss for SHFE copper in the current month narrowed somewhat during the day, with losses hovering around 400 yuan/mt.

       Trading activity was high during the day. Early in the morning session, low-priced registrable warrant cargoes were snapped up in large quantities. Large traders showed strong purchasing sentiment, with today's purchasing sentiment index at 3.18, up 0.13 from yesterday. Due to the persistent discounts before the contract rollover, some suppliers were reluctant to sell at low prices, preferring to deliver as warrants. Consequently, the selling sentiment index decreased by 0.02 from yesterday to 3.25. During the main trading period, cargoes such as those from Tiefeng, Japan, South Korea, and Zhongtiaoshan PC were actively traded and subsequently resold at a premium by the buyers. In the second trading period, market selling prices rose to around a discount of 30 yuan/mt, with high-quality copper trading at a premium again. Only a small amount of SX-EW copper mook cargoes were available at around a discount of 70 yuan/mt, while non-registrable cargoes were traded at discounts ranging from 180 yuan/mt to 120 yuan/mt.

       As the delivery countdown begins, warrant inventories increased slightly yesterday. However, with traders' purchasing sentiment rising, warrant volumes are expected to gradually increase. Spot discounts may remain firm tomorrow.