Thanks to the significant narrowing of the price spread between futures contracts, suppliers actively refused to budge on prices when shipping goods [SMM spot copper in South China]

SMM reported on July 15:

Today, in Guangdong, the spot prices of #1 copper cathode against the front-month contract ranged from a discount of 40 yuan/mt to a premium of 50 yuan/mt, with an average premium of 5 yuan/mt, up 35 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 100 yuan/mt to 80 yuan/mt, with an average discount of 90 yuan/mt, up 70 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,040 yuan/mt, down 385 yuan/mt from the previous trading day, while the average price of SX-EW copper was 77,945 yuan/mt, down 350 yuan/mt from the previous trading day.

Spot market: Guangdong's inventory has increased for two consecutive days. As the contract rollover approaches, downstream consumption remains sluggish, leading to a continuous rise in inventory. Benefiting from a significant narrowing of the price spread between futures contracts, suppliers are actively refusing to budge on prices and selling goods. However, the excessive increase in premiums has led to sluggish downstream replenishment. As of 11 a.m., high-quality copper for the front-month contract was quoted at 50 yuan/mt, standard-quality copper at a discount of 40 yuan/mt, and SX-EW copper at a discount of 90 yuan/mt. It is worth noting that most suppliers today quoted prices for the next-month contract, with standard-quality copper at a premium of 10 yuan/mt. It is expected that standard-quality copper will remain firm above parity tomorrow, and trading volume is also anticipated to improve.

Overall, benefiting from a significant narrowing of the price spread between futures contracts, suppliers are actively refusing to budge on prices and selling goods, leading to a significant increase in spot premiums.

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