Social Inventory Plunged, Shanghai Spot Copper Premiums Held Steady Amid Bargaining [SMM Shanghai Spot Copper]

SMM News, March 23:

In the morning session, the SHFE copper 2604 contract opened lower with a gap and then rebounded, before fluctuating rangebound. It opened lower and dipped to 91,890 yuan/mt, then rebounded to around 92,800 yuan/mt. Prices then fluctuated between 92,600 yuan/mt and 93,100 yuan/mt, before hitting a high of 93,130 yuan/mt and pulling back, with the closing price at 92,620 yuan/mt. The price spread between futures contracts for adjacent months ranged between Contango 30 yuan/mt and Backward 20 yuan/mt, while the import profit margin for the front-month SHFE copper contract ranged between a profit of 240 yuan/mt and a profit of 320 yuan/mt.

During the day, sales sentiment for copper cathode in Shanghai stood at 2.78, down 0.04 MoM, while procurement sentiment was 2.65, down 0.15 MoM.. At the start of the morning session, suppliers quoted standard-quality copper at discounts of 100 yuan/mt to 50 yuan/mt, among which JCC and Lufang were quoted at discounts of 50 yuan/mt to 40 yuan/mt; Jinchuan ISA, Tiefeng, Zijin, Honglu, and Jinchuan ISA Yongchang were quoted at discounts of 100 yuan/mt to 80 yuan/mt; and Jinguan, Jinxin, Jinfeng, and Jintun PC were quoted ex-works at discounts of 40 yuan/mt to 20 yuan/mt. High-quality copper such as Guixi, Jinchuan (plate), and Jintun plate was quoted at premiums of 10 yuan/mt to 20 yuan/mt. In the second trading period, suppliers lowered prices slightly. Standard-quality copper including Tiefeng, Honglu, and Dajiang HS was quoted at discounts of 100 yuan/mt to 90 yuan/mt, while Zhongjin, Zhongtiaoshan, Tiefeng, and OLYDA were successively traded at discounts of 90 yuan/mt to 80 yuan/mt. High-quality copper Guixi was successively traded at discounts of 30 yuan/mt to parity.

Looking ahead to tomorrow, the Shanghai spot copper market is expected to maintain a tug-of-war pattern. Copper prices fell somewhat during the day, and downstream enterprises showed stronger restocking sentiment, but considering that large-scale replenishment had already been concentrated last week, actual incremental procurement was relatively limited. Inventory side, according to SMM, combined social inventory in Shanghai and Jiangsu fell by about 41,600 mt, showing a sharp destocking trend. During the day, suppliers' quotations were steady first and then lowered, and they actively shipped goods on the rebound in premiums, with selling behavior weighing on spot prices. In addition, some suppliers had already used cargoes with invoices dated next month to quote against the SHFE copper 2604 contract during the day, indirectly reflecting that in-month sales were moderate and suppliers had strong willingness to sell. Overall, amid the tug-of-war between faster destocking and supplier selling, Shanghai spot copper premiums are expected to remain at the current level tomorrow.