Continuous outflow of warrants suppresses premium; attention should be paid to the arrival situation next week [spot copper in South China, SMM]

SMM News on June 20:

Today in Guangdong, spot #1 copper cathode was quoted at premiums of 50 yuan/mt to 130 yuan/mt against the front-month contract, with an average premium of 90 yuan/mt, a decrease of 45 yuan/mt from the previous trading day. SX-EW copper was quoted at discounts of 10 yuan/mt to premiums of 10 yuan/mt, with an average premium of 0 yuan/mt, a decrease of 40 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,455 yuan/mt, a decrease of 220 yuan/mt from the previous trading day, while the average price of SX-EW copper was 78,365 yuan/mt, a decrease of 215 yuan/mt from the previous trading day.

Spot Market: In Guangdong, inventory has declined for four consecutive days. As the weekend approaches, downstream procurement volume has increased somewhat, but arrivals remain low, leading to a continued decline in inventory. However, this has not prevented premiums and discounts from continuing to fall. The reason is that suppliers are bearish on future premiums, especially warrant holders who are eager to liquidate their holdings. According to statistics, the current warrant volume in Guangdong is 8,600 mt, a decrease of 1,300 mt from yesterday. As of 11 a.m., high-quality copper for the front-month contract was quoted at 130 yuan/mt, standard-quality copper at a premium of 50 yuan/mt, and SX-EW copper at a premium of 0 yuan/mt.

Overall, the continuous outflow of warrants has suppressed premiums. Attention should be paid to the arrival situation next week. If arrivals increase, premiums may fall further.

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