After the contract rollover, spot copper returned to a discount, but it is expected to rise next week [SMM Southern China Spot Copper]

SMM Jan. 16:

       Today, spot prices of #1 copper cathode in Guangdong against the front-month contract were at a discount of 150-80 yuan/mt, with the average discount at 115 yuan/mt, down 245 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 240-200 yuan/mt, with the average discount at 220 yuan/mt, down 240 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 102,325 yuan/mt, down 155 yuan/mt from the previous trading day, while the average price of SX-EW copper was 102,220 yuan/mt, down 150 yuan/mt from the previous trading day. Spot market: Guangdong inventory ended two consecutive declines and increased again, mainly due to higher arrivals. As the price spread between futures contracts was wide yesterday, spot premiums showed large discounts after the contract rollover today, though the discount narrowed compared to yesterday when standard-quality copper was quoted at a discount of 200 yuan/mt. In addition, downstream restocking enthusiasm increased today compared to yesterday. Today, purchasing sentiment for copper cathode in Guangdong was 2.32, up 0.2 from the previous trading day, while selling sentiment was 2.95, up 0.2 from the previous trading day (historical data can be queried in the database). As of 11:00, high-quality copper against the front-month contract was quoted at a discount of 80 yuan/mt, standard-quality copper at a discount of 150 yuan/mt, and SX-EW copper at a discount of 220 yuan/mt. Finally, we expect demand to increase next week, and spot premiums are expected to fluctuate higher.

       Overall, spot prices returned to large discounts after the contract rollover, but are expected to fluctuate higher next week.