Inventory continues to increase significantly, while spot premiums keep declining [SMM spot copper in South China]

SMM News on June 4:

Today, spot #1 copper cathode in Guangdong was quoted at a discount of 130 yuan/mt to a premium of 0 yuan/mt against the front-month contract, with an average discount of 65 yuan/mt, down 5 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 190 yuan/mt to 170 yuan/mt, with an average discount of 180 yuan/mt, down 10 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,295 yuan/mt, up 115 yuan/mt from the previous trading day, while the average price of SX-EW copper was 78,180 yuan/mt, up 110 yuan/mt from the previous trading day.

Spot Market: Guangdong's inventory has surged for four consecutive days, currently up 14,300 mt from the previous low, primarily due to concentrated arrivals from smelters. The continuous increase in inventory has led downstream buyers to anticipate a decline in spot premiums, prompting suppliers to continue lowering premiums to sell. As of 11 a.m., high-quality copper against the front-month contract was quoted at 0 yuan/mt, standard-quality copper at a discount of 130 yuan/mt, and SX-EW copper at a discount of 180 yuan/mt. The supply of high-quality copper remains tight, and as the delivery date approaches, its quotes remain firm, widening the price spread with standard-quality copper.

Overall, with the continuous and significant increase in inventory, spot premiums continue to decline, and overall trading activity remains moderate.

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