Warrant outflows, price spread between futures contracts widens, Shanghai spot copper premiums continue to decline [SMM Shanghai spot copper]

SMM News on June 20:

       Today, SMM reported spot premiums for #1 copper cathode against the July 2025 (2507) contract at 80-160 yuan/mt, with an average premium of 120

yuan/mt, a decrease of 25 yuan/mt from the previous trading day. The SMM #1 copper cathode price ranged from 78,240 to 78,560 yuan/mt. In the early morning session, SHFE copper prices briefly surged to 78,450 yuan/mt before pulling back, and then continued to decline, testing the 78,160 yuan/mt level near 11 a.m., closing at 78,120 yuan/mt in the morning session. The BACK price spread between futures contracts continued to widen, fluctuating between 200-220 yuan/mt during the morning trading session.

       Spot premiums fell further during the day, as the widening price spread between futures contracts prompted some suppliers to offer discounts on spot premiums. Meanwhile, the continuous outflow of warrants led to a decline in spot transactions. In the early morning session, suppliers quoted mainstream standard-quality copper at premiums of 120-160 yuan/mt and high-quality copper at 140-180 yuan/mt. However, transactions quickly concentrated at premiums of 120-150 yuan/mt. Subsequently, cargoes from producers such as Tiefeng, Honglu, Dajiang PC, and Yuguang were actively traded in the Changzhou area at premiums ranging from 40-80 yuan/mt. Due to maintenance at rod mills in the Jiangsu region, purchasing sentiment was low during the day. Non-registered cargoes continued to be quoted at discounts, with transactions occurring at around a 50 yuan/mt discount.

       Looking ahead to next week, it is reported that with the semi-annual settlement approaching, most enterprises have cash collection needs. It is expected that the demand for enterprises to sell goods for cash will increase next week, and spot premiums will fall further.