Price spread between futures contracts continues to widen, with strong wait-and-see sentiment in the downstream market; suppliers can only sell at reduced prices [SMM spot copper in South China]

SMM, June 13:

Today in Guangdong, spot #1 copper cathode was quoted at a discount of 30 yuan/mt to a premium of 80 yuan/mt against the front-month contract, with an average premium of 25 yuan/mt, down 35 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 100 yuan/mt to 80 yuan/mt, with an average discount of 90 yuan/mt, down 50 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,875 yuan/mt, down 135 yuan/mt from the previous trading day, while the average price of SX-EW copper was 78,760 yuan/mt, down 150 yuan/mt from the previous trading day.

Spot market: Recently, arrivals of both imported and domestic copper have been low, causing Guangdong's inventory to decline for seven consecutive days. However, as the delivery month approaches, the price spread between futures contracts has widened significantly again, leading downstream manufacturers to adopt a wait-and-see attitude, with few buyers. As a result, suppliers have had to continuously lower premiums to sell their goods, and ultimately, standard-quality copper had to be sold at a discount to secure transactions. As of 11 a.m., high-quality copper for the front-month contract was quoted at 80 yuan/mt, standard-quality copper at a discount of 30 yuan/mt, and SX-EW copper at a discount of 90 yuan/mt.

Overall, with the price spread between futures contracts continuing to widen, downstream sentiment remains cautious. Suppliers have had to cut prices to sell their goods, but with limited success, resulting in weak overall trading activity.

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