SHFE copper spot premiums continue to be suppressed, downstream stockpiling at low prices drives inventory drawdown [SMM Shanghai spot copper]

SMM News on May 29:

       Today, spot #1 copper cathode against the SHFE copper 2506 contract was quoted at a premium of 90-210 yuan/mt, with an average quoted premium of 150 yuan/mt, unchanged from the previous trading day. The SMM #1 copper cathode price ranged from 78,380 to 78,590 yuan/mt. SHFE copper prices jumped initially and then pulled back in the morning session, reaching a high of 78,390 yuan/mt before falling to around 78,280 yuan/mt. The BACK price spread between futures contracts for the next month continued to hover around 300 yuan/mt, while the SHFE/LME price ratio continued to weaken.

       In the morning session, suppliers quoted lower prices than yesterday, with mainstream standard-quality copper trading at a premium of around 120 yuan/mt. Subsequently, the premium was suppressed to 90 yuan/mt, after which purchases were made rapidly. Then, JCC and other brands became scarce, and prices rose again to a premium of 120 yuan/mt. All transactions were for cargoes with invoices dated next month. Premium-quality copper remained in short supply, with recent transactions ranging from 180-200 yuan/mt. Non-registered copper traded at a discount of 20 yuan/mt to parity. Arrivals have been limited recently, but downstream demand has been average.

       Tomorrow is the last trading day of May, and companies are generally closing their books for settlement. It is expected that the number of sellers will decrease, and purchasing demand will also decline somewhat. Small enterprises may still be stockpiling for the Dragon Boat Festival. It is anticipated that premium prices will stabilize and slightly increase tomorrow.