SHFE/LME Price Ratio Collapses, Spot Market Shifts to Buyer's Market; Extreme Disparity Between Buying and Selling Prices Makes Deals Hard to Close [SMM Yangshan Spot Copper]

        June 6, 2025 News: Today, warrant prices ranged from $35 to $47/mt, with QP in June. The average price fell by $38/mt compared to the previous trading day. B/L prices ranged from $50 to $80/mt, with QP in July. The average price fell by $33/mt compared to the previous trading day. EQ copper (CIF B/L) prices ranged from $8/mt to $20/mt, with QP in July. The average price fell by $32/mt compared to the previous trading day. Quotations referenced cargo arriving in mid-to-late June.

        During the day, the price ratio collapsed. The SHFE/LME price ratio for the SHFE copper 2506 contract was around -1,600 yuan/mt. LME copper 3M-Jun was in backwardation structure of $80.91/mt. The swap fee difference between June date and July date widened to around backwardation structure of $31/mt. The combination of a high backwardation structure and a deteriorating price ratio has completely turned the import market into a buyer's market. The bid-ask spread is extremely fragmented. It was heard that among traders, domestic pyrometallurgy ER copper B/L offers were around $50 in mid-June, with the lowest bid heard at $30, QP in July, but no transactions were concluded. Domestic warrant offers were around $40, with no bids heard and transactions difficult to conclude. EQ B/L offers for cargo arriving in mid-June were reported at $20, QP in July, with buyer's bids at -$20, but no transactions were heard. Overall, the spot premium has collapsed significantly. According to SMM, major domestic smelters are currently planning to export, and offshore spot premiums will continue to face short-term pressure.