After contract rollover, spot premiums stopped falling and rebounded, and are expected to continue rising next week [SMM Weekly Review of Spot Copper Cathode in South China]

SMM News on July 17:

Guangdong Region: This week, the premiums and discounts in the region showed a trend of hitting bottom and then rebounding. Before the delivery, spot premiums were under pressure and fell. After the delivery, the price spread between futures contracts reversed, and suppliers actively refused to budge on prices and shipped goods, stimulating premiums to rise. As of Thursday, high-quality copper was quoted at a premium of 100 yuan/mt, up 50 yuan/mt from last Thursday. Standard-quality copper was quoted at a premium of 30 yuan/mt, up 130 yuan/mt from last Thursday. SX-EW copper was quoted at a discount of 20 yuan/mt, up 130 yuan/mt from last Thursday. On Thursday, the price spread between premiums and discounts for standard-quality copper in Shanghai and Guangdong was 30 yuan/mt higher in Shanghai, with a relatively small price spread, leaving no room for cross-regional cargo transfers. According to SMM statistics, as of Thursday, the total inventory in Guangdong warehouses was 25,800 mt, an increase of 2,000 mt from last Thursday. The total warrants were 17,800 mt, an increase of 8,300 mt from last Thursday. Specifically: This week, the arrivals at the warehouses were 15,600 mt/week, an increase of 2,400 mt/week from last week, higher than the annual average (14,000 mt/week). The active shipping of goods to warehouses by suppliers before the delivery was the main reason for the increase in arrivals. The outflows from warehouses were 13,500 mt/week, an increase of 5,200 mt/week from last week, still lower than the annual average (14,200 mt/week). The decline in copper prices and the change in the price spread structure improved downstream consumption after the delivery.

Looking ahead to next week, it is reported that the arrivals of both imported copper and domestically produced copper will be limited. However, consumption is expected to increase compared to this week. Therefore, we believe that next week will see a situation of reduced supply and increased demand, and weekly inventory is expected to decline again. However, it is worth worrying about whether a large amount of warrants (currently 17,800 mt) will flow out in large quantities, thereby impacting premiums.

》Subscribe to view SMM metal spot historical prices         

(The above information is based on market collection and comprehensive assessment by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make cautious decisions and not rely on this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.)