Before contract rollover, downstream purchase willingness was low. Copper prices continued to weaken, but demand is expected to improve [SMM Weekly Review of Spot Copper Cathode in North China]

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       As of Thursday this week, the spot premiums/discounts in North China ranged from a discount of 210 yuan/mt to a discount of 170 yuan/mt, with an average discount of 190 yuan/mt. Although copper prices fell during the week, the continuous decline in futures prices led downstream buyers to develop a fear of further price drops. In addition, as the delivery date approached, the price spread between futures contracts structure made downstream buyers expect that there was still downside room for spot premiums/discounts before the contract rollover. Moreover, as it was currently the off-season, consumption was weak, so downstream buyers' purchasing sentiment was low. However, suppliers were under relatively small pressure and had little willingness to dump goods, so market activity was sluggish. Looking ahead, the market will trade on the contract rollover logic next week as it crosses the delivery date. If copper prices weaken further, it will boost consumption demand and is expected to stimulate downstream restocking actions.

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