Delivery Dynamics Provided Support, but Pressure Emerged as the Import Window Became Visible; Shanghai Spot Copper Remained at a Premium Under Pressure [SMM Shanghai Spot Copper]

SMM, March 13:

In early trading, the SHFE 2603 copper contract showed a pattern of wide swings and decline. It opened at 100,450 yuan/mt. After the opening, the price repeatedly rose and then quickly pulled back, fluctuating widely between 100,320 yuan/mt and 100,620 yuan/mt, before continuing to fall. By the close, it had dipped to 100,230 yuan/mt. The inter-month Contango spread was between 300 yuan/mt and 230 yuan/mt, while the import profit margin for the SHFE copper front-month contract remained at a loss of between 130 yuan/mt and 10 yuan/mt.

Intraday, sales sentiment for copper cathode in Shanghai was 2.87, down 0.07 MoM, and procurement sentiment was 2.68, down 0.03 MoM. . At the start of morning trading, suppliers quoted spot premiums of 50-100 yuan/mt for standard-quality copper, with HMG-B and JCC, among others, quoted at premiums of 80-100 yuan/mt, while Jinchuan isa, Zhongjin, Zhongtiaoshan, Tiefeng, Jinfeng, and Yuguang, among others, were quoted at premiums of 50-70 yuan/mt; high-quality copper such as Guixi and Jinchuan (plate) was quoted at premiums of 130-150 yuan/mt; registered SX-EW copper was scarce, with only some Myanmar cargoes in circulation, so prices remained firm at a premium of 20 yuan/mt; non-registered copper was quoted at discounts of 30-20 yuan/mt. Entering the second trading session, procurement intensity from downstream enterprises pulled back somewhat, and some suppliers lowered prices. Tiefeng traded successively at premiums of 30-40 yuan/mt, while Jinguan, Jinxin, Tongguan, and Jinfeng, among others, traded successively at quoted premiums of 60-100 yuan/mt. In addition, some suppliers were already seen making tentative quotations against the 04 contract intraday.

Looking ahead to next week, next Monday will be the last trading day of the SHFE 2603 copper contract. Under the SMM price assessment methodology for #1 copper cathode, SMM always quotes against the front-month contract. The inter-month Contango spread narrowed slightly, and suppliers' willingness to ship to delivery warehouse weakened somewhat, marginally loosening support for spot premiums. Meanwhile, import losses have narrowed significantly, and there are signs that the import window is about to open. If the window opens, it will bring in cargoes from outside China, increasing pressure on spot supply in China and potentially capping premiums. Demand side, downstream buyers maintained just-in-time procurement, providing some support for prices, but intraday it was evident that some downstream enterprises had limited acceptance of high-premium spot copper, and procurement turned more cautious; supply side, domestic copper and previously price-locked imported cargoes continued to arrive, while social inventory remained high. As SMM always quotes against the front-month contract, based on the contract spread switch, spot premiums are expected to remain at a high level against the front-month contract, but this is expected to be corrected on the second trading day. Overall, under delivery-driven logic, Shanghai spot copper premiums are expected to remain high next Monday.