Concerns about warrant outflows weighing on premiums prompt SHFE copper traders to rush to sell during the day [SMM Shanghai spot copper]

SMM News on June 18:

      Today, spot prices for SMM #1 copper cathode against the current-month 2507 contract were quoted at premiums of 140-220 yuan/mt, with an average premium of 180

yuan/mt, a decrease of 60 yuan/mt from the previous trading day. The SMM #1 copper cathode price ranged from 78,740 to 78,920 yuan/mt. The SHFE copper 2506 contract opened higher in the morning session, briefly touching 78,720 yuan/mt before giving up gains and subsequently trading between 78,620 and 78,680 yuan/mt, closing at 78,650 yuan/mt in the morning. The price spread between futures contracts (BACK) fluctuated between 150-180 yuan/mt in the morning session, with an estimated import loss of approximately 900 yuan/mt for the current-month SHFE copper contract.

      At the beginning of the morning session, suppliers quoted premiums of 200-230 yuan/mt for brands such as JCC, Lufang, and Xiangguang. However, as traders concluded transactions for JCC at a lower premium of 170 yuan/mt, mainstream transaction prices weakened. Subsequently, brands such as Tiefeng, Honglu, and Yuguang from the Changzhou region were traded at premiums of 120-140 yuan/mt. Russian copper continued to be sold at lower prices throughout the day, with transactions ranging from parity to premiums of 40 yuan/mt.

      No significant outflow of warrants was observed in the morning session, but suppliers were concerned that subsequent warrant outflows would pressure premiums, leading to a noticeable rush to sell today. It is expected that there will be further downside room for spot premiums after warrant outflows tomorrow.