Decline in copper prices fails to hinder premium reduction; downstream reluctance to restock is the main cause [SMM spot copper in South China]

SMM News on July 7:

Today, in Guangdong, spot #1 copper cathode is trading at a discount of 60 yuan/mt to a premium of 50 yuan/mt against the front-month contract, with an average discount of 5 yuan/mt, a decrease of 30 yuan/mt from the previous trading day. SX-EW copper is quoted at a discount of 120 yuan/mt to a discount of 100 yuan/mt, with an average discount of 110 yuan/mt, a decrease of 50 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong is 79,805 yuan/mt, a decrease of 745 yuan/mt from the previous trading day, while the average price of SX-EW copper is 79,700 yuan/mt, a decrease of 765 yuan/mt from the previous trading day.

Spot Market: Guangdong's inventory has increased for six consecutive days, primarily due to an increase in arrivals. Although copper prices have pulled back, downstream consumers remain bearish about future premiums and are reluctant to purchase more. Suppliers have to continuously lower their prices, leading to a sustained decline in premiums today. As of 11 a.m., high-quality copper for the front-month contract is quoted at 50 yuan/mt, standard-quality copper at a discount of 80 yuan/mt, and SX-EW copper at a discount of 130 yuan/mt. Attention should be paid to whether inventory will continue to decline in the future.

Overall, the decline in copper prices has not hindered the downward adjustment of premiums, with downstream consumers' reluctance to replenish stocks being the main reason.

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