Weak SHFE/LME price ratio and expanding backwardation structure drive market counter-offers to push down guided transaction premiums [SMM spot copper at Yangshan]

On May 16, 2025: Today, warrant prices ranged from $90 to $100/mt, with QP in June, and the average price fell by $5/mt compared to the previous trading day. B/L prices ranged from $102 to $120/mt, with QP in June, and the average price fell by $4/mt compared to the previous trading day. EQ copper (CIF B/L) prices ranged from $74 to $86/mt, with QP in June, and the average price fell by $2/mt compared to the previous trading day. Quotations were based on cargoes expected to arrive in mid-to-late May.

Today, the spot premium continued to decline compared to yesterday, with significant differences between buyer counteroffers and seller offers. Due to the expansion of the LME June date backwardation structure and the weak SHFE/LME price ratio, along with an expected increase in cargo arrivals in late May, the overall guidance pushed the transaction center downward. It was heard that among traders, offers for domestic pyrometallurgy B/Ls in late May were at $110-115, with firm offers dropping to $95-100, with QP in June; general pyrometallurgy offers were around $115-120, with a small amount of two-brand cargoes offered at $130-140, with QP in June; domestic warrant offers were around $95-100, with QP in June; EQ B/L offers for cargoes expected to arrive in early June were at $80-90, with buyer counteroffers at $60-70, with QP in June. Overall, the market sentiment among sellers to unload cargoes increased, but transactions remained limited.