Copper Prices Pull Back Sharply, Downstream Users Replenish Stocks Moderately, Spot Premiums Rise Significantly [SMM Southern China Spot Copper]

SMM Feb. 5:

Today, spot prices of #1 copper cathode in Guangdong against the front-month contract were at a discount of 170-0 yuan/mt, with the average discount at 85 yuan/mt, up 75 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 260-200 yuan/mt, with the average discount at 230 yuan/mt, up 80 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 101,565 yuan/mt, down 3,075 yuan/mt from the previous trading day, while the average price of SX-EW copper was 101,420 yuan/mt, down 3,070 yuan/mt from the previous trading day.

Spot market: Guangdong inventory ended two consecutive declines and increased slightly, mainly due to increased arrivals. Downstream plants increased procurement volume appropriately as copper prices pulled back sharply, but the buying enthusiasm came more from traders, as the large price spread between futures contracts prompted traders to actively purchase for arbitrage. Today, procurement sentiment for copper cathode in Guangdong was 2.54, up 0.33 from the previous trading day, while sales sentiment was 2.81, down 0.28 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 parity, standard-quality copper at a discount of 170 yuan/mt, and SX-EW copper at a discount of 230 yuan/mt.

Overall, downstream users replenished stocks appropriately as copper prices pulled back sharply, spot premiums increased significantly, and overall trading improved.