Suppliers Held Prices Firm and Withheld Sales Amid the C Price Spread Between Futures Contracts; Pullback in Copper Prices Drove a Recovery in Spot Discounts [SMM Shanghai Spot Copper]

SMM March 6 News:

In early trading, the SHFE copper 2603 contract opened lower and moved higher. It opened at 100,550 yuan/mt and quickly dipped to 100,300 yuan/mt after the open, then rebounded, rising to 101,200 yuan/mt before dropping slightly. It later began to rise from 100,910 yuan/mt, touched a high of 101,240 yuan/mt, and closed at 101,080 yuan/mt. The contango price spread between futures contracts for the next-month contract ranged between 300 yuan/mt and 240 yuan/mt, while the import profit margin for the current-month SHFE copper contract ranged between a loss of 540 yuan/mt and 400 yuan/mt.

Intraday, in Shanghai, the sales sentiment for copper cathode was 2.86, up 0.06 MoM, while purchase sentiment was 2.72, down 0.04 MoM,. At the start of the morning session, suppliers attempted to quote standard-quality copper at discounts of 70 yuan/mt to 50 yuan/mt, then quickly adjusted prices to discounts of 120 yuan/mt to 40 yuan/mt. Among them, Zhongtiaoshan, Jinchuan ISA, Jinguang, Zhongjin, Yuguang, Dajiang HS, and Jinchuan isa Yongchang were quoted at discounts of 120 yuan/mt to 10 yuan/mt; Polish plate, SUMIKO-N, Lufang, and Xiangguang were quoted at discounts of 80 yuan/mt to 40 yuan/mt; high-quality copper such as Guixi and Jinchuan (plate) were quoted at parity; and non-registered copper was quoted at discounts of 200 yuan/mt to 180 yuan/mt. Entering the second time window, suppliers showed strong willingness to hold prices firm. Standard-quality copper prices saw no significant change, and Jinguang, Jinxin, and Tongguan, among others, were traded successively at quoted discounts of 110 yuan/mt to 80 yuan/mt.

Looking ahead to next week, Shanghai spot copper discounts are expected to continue a steady recovery. From the market structure perspective, the next-month contango price spread between futures contracts holding around 300 yuan/mt has led suppliers to hold prices firm and withhold sales, while the downward shift in the center of copper prices has effectively stimulated downstream purchase willingness, driving a notable rise in spot premiums. Supply side, domestic copper and previously price-locked imported cargoes continue to arrive, and with social inventory at elevated levels, overall circulating supply remains ample. Under the combined effects of suppliers holding prices firm and downstream buying the dip, the momentum for spot discount recovery is expected to continue.