Post-Rollover Spot Premiums Showed Significant Discounts, Expected to Remain Weak Next Week [SMM Southern China Copper Cathode Spot Weekly Review]

SMM January 22:
 

Guangdong Region: Spot premiums and discounts in the region pulled back significantly this week. As the price spread between futures contracts widened substantially before the contract rollover, spot cargo saw a large discount after the rollover, narrowing only slightly on Thursday. As of Thursday, high-quality copper was quoted at a discount of 90 yuan/mt, down 250 yuan/mt WoW; standard-quality copper was quoted at a discount of 200 yuan/mt, down 300 yuan/mt WoW; and SX-EW copper was quoted at a discount of 250 yuan/mt, down 270 yuan/mt WoW. On Thursday, the price spread for standard-quality copper premiums and discounts between Shanghai and Guangdong was 60 yuan/mt higher in Guangdong, which was relatively small, so there was no inter-regional transfer of goods. According to SMM statistics, as of Thursday, total warehouse inventory in Guangdong was 47,500 mt, down 700 mt WoW, with warrants totaling 28,300 mt, down 1,700 mt WoW. Specifically, warehouse arrivals this week were 12,600 mt/week, down 6,500 mt/week WoW, below the annual average (14,000 mt/week), as arrivals dropped noticeably after delivery. Warehouse withdrawals were 13,800 mt/week, down 111 mt/week WoW, slightly below the annual average (14,200 mt/week). Since copper prices remained above 100,000 yuan, downstream restocking enthusiasm stayed generally subdued, without a significant increase.

Looking ahead to next week, with the month-end approaching and copper prices still high, downstream consumption is expected to be weak, and inventory is likely to face buildup pressure, while spot premiums are expected to fluctuate at lows.

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