Dual pressure from imports and warrant shipments; price collapse in shipments led to a significant drop of 100 yuan per mt in premium [[SMM Shanghai spot copper]]

SMM News on May 21:

       Today, SMM #1 copper cathode spot prices were quoted at a premium of 200-350 yuan/mt against the SHFE copper 2506 contract for the current month, with an average quoted premium of 275 yuan/mt, down 115 yuan/mt from the previous trading day. The SMM #1 copper cathode price range was 78,290-78,630 yuan/mt. In the morning session, the SHFE copper 2506 contract briefly dipped to 78,050 yuan/mt before continuing to rise, with open interest increasing and the futures market touching a high of 78,300 yuan/mt before partially retracing gains, closing at 78,150 yuan/mt in the morning. The BACK price spread between futures contracts for the next month converged near 300 yuan/mt, with a loss of nearly 1,000 yuan/mt for current-month imports.

       In the early morning session, suppliers continued to lower their quotes from the previous day, but the gap between mainstream standard-quality copper, high-quality copper, and other standard-quality copper was too large. Cargoes from sources such as Tiefeng, Dajiang PC, Japan, South Korea, Honglu, Jinguan, and Jinfeng were initially quoted at a premium of 230-260 yuan/mt. Downstream buyers actively purchased at a premium of around 230 yuan/mt, and the market further adjusted downwards to around 200 yuan/mt, with individual suppliers rushing to sell, achieving transactions at a premium of 160 yuan/mt. At this time, quotes for sources such as Xiangguang, JCC, and Lufang remained at 220-240 yuan/mt, with Jinchuan (plate) quoted at a premium of 300 yuan/mt and Jintun (plate) at a premium of 280 yuan/mt. Non-registered standard-quality copper also struggled to find buyers under the pressure of continuously declining standard-quality copper quotes, with most offers at 100 yuan/mt.

      The sentiment for selling during the day fell to 3.12, mainly because some smelters did not directly sell, and the market was dominated by low-priced selling by import traders and warrant-holding traders. The purchasing sentiment index rose to 3.26, primarily due to the decline in premiums, with downstream buyers actively bargaining down purchasing prices. It is expected that warrant-holding and import cargo suppliers will maintain a strong sentiment for selling tomorrow, and spot premiums may still be suppressed. However, it should be noted that when premiums fall below 100 yuan/mt, the market's purchasing sentiment may further increase.