Outflow of copper warrants suppresses premium, while decline in futures market fails to stimulate downstream purchasing sentiment [SMM Shanghai spot copper]

SMM News on June 18:

     Today, SMM #1 copper cathode spot premiums against the current-month 2507 contract were reported at a range of 110-180 yuan/mt, with an average premium of 145 yuan/mt, down 35 yuan/mt from the previous trading day. The SMM #1 copper cathode price was 78,610-78,750 yuan/mt. In the morning session, the SHFE copper 2506 contract fluctuated between 78,500-78,600 yuan/mt, with the price center gradually declining. The price spread between futures contracts (BACK) for the next month widened from 180 yuan/mt to nearly 200 yuan/mt.

     Yesterday, there was a significant outflow of SHFE warrants, and spot premiums for SHFE copper continued to decline. Throughout the day, some suppliers were still actively selling warrants, with transaction prices continuing to fall in the morning. In the morning, suppliers quoted premiums of 130-160 yuan/mt for brands like Luxiang Xiangguang JCC, 170-200 yuan/mt for brands like Jinchuan Guixi, and around 100 yuan/mt for brands like Tiefeng. Subsequently, market transactions weakened, with brands like Tiefeng, Honglu, and GTJC being traded at premiums of 80-100 yuan/mt, and brands like Xiangguang Luxiang JCC being traded at premiums of 120-150 yuan/mt. High-quality copper was traded at premiums of 160-170 yuan/mt.

     Looking ahead to tomorrow, Russian copper is still being sold in large quantities in the market today. Despite the lower prices, the market's absorption capacity is limited. It is expected that low-priced supplies will still be difficult to fully digest tomorrow, and warrants will continue to flow out. However, as it approaches Friday, downstream procurement demand is expected to improve compared to today, and it is anticipated that the decline in spot premiums for SHFE copper will be limited.