Spot premiums surged significantly on the first day after contract rollover, with overall trading activity remaining weak [SMM spot copper in South China]

SMM May 16 News:

Today, in Guangdong, spot prices for #1 copper cathode against the front-month contract were quoted at a premium of 310 yuan/mt to 410 yuan/mt, with an average premium of 360 yuan/mt, up 385 yuan/mt from the previous trading day. SX-EW copper was quoted at a premium of 250 yuan/mt to 270 yuan/mt, with an average premium of 260 yuan/mt, up 410 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,730 yuan/mt, down 110 yuan/mt from the previous trading day, while the average price of SX-EW copper was 78,630 yuan/mt, down 85 yuan/mt from the previous trading day.

Spot Market: In Guangdong, inventory has risen for two consecutive days, primarily due to increased arrivals and weakened consumption. Affected by the price spread between futures contracts, spot premiums surged significantly after the contract rollover, with early morning quotes generally at 400 yuan/mt. However, downstream buyers were reluctant to purchase at such high levels, forcing suppliers to continuously lower their premium offers to secure sales, leading to a sustained decline in spot premiums. As of 11 a.m., high-quality copper against the front-month contract was quoted at 380 yuan/mt, standard-quality copper at a premium of 280 yuan/mt, SX-EW copper at a premium of 230 yuan/mt, and non-standard copper at 100 yuan/mt. Attention should be paid to whether inventory will continue to rise next week.

Overall, on the first day after the contract rollover, spot premiums surged significantly but were not accepted by downstream buyers, resulting in weak overall trading activity.

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