Cross-Regional Arbitrage Window Continued to Widen, Tight Cargoes with Invoices Dated This Month Expected to Support Spot Premiums [SMM Shanghai Spot Copper]

SMM April 22:

In the morning session, SHFE copper 2605 opened higher, pulled back, stabilized, and then rebounded again. The opening price was 102,010 yuan/mt. After opening, prices rose quickly, touching a high of 102,380 yuan/mt. Prices then pulled back slightly with multiple rebounds, declining to 102,100 yuan/mt before stabilizing and rebounding, with a closing price of 102,330 yuan/mt. The inter-month Contango price spread ranged from 130 yuan/mt to 80 yuan/mt. The import profit margin for Shanghai spot copper against the 2605 contract ranged from a loss of 200 yuan/mt to a loss of 140 yuan/mt.

During the day, the selling sentiment for copper cathode in Shanghai was 2.82, unchanged from the previous day, while the procurement sentiment was 2.71, down 0.03 MoM.. At the start of the morning session, suppliers showed strong wait-and-see sentiment. Standard-quality copper Jintong PC, Zhongtiaoshan, and Tiefeng were quoted at a discount of 10 yuan/mt to parity. Suppliers then lowered prices, quoting standard-quality copper at a discount of 30 yuan/mt to a premium of 10 yuan/mt, among which Peru (plate), Xiangguang, JCC, etc. were quoted at a discount of 10 yuan/mt to a premium of 10 yuan/mt; Dajiang PC, Tiefeng, Dajiang HS, etc. were quoted at a discount of 30 yuan/mt to a discount of 20 yuan/mt; Jinguan, Jinxin, Jinfeng, and Jintong PC were quoted at parity to a premium of 10 yuan/mt ex-factory. High-quality copper Guiye and Jintong (plate) were quoted at a premium of 40 yuan/mt. In the second trading period, suppliers further lowered prices. High-quality copper Guiye, Jinchuan (plate), etc. were traded at a premium of 10 yuan/mt to a premium of 20 yuan/mt. Jinguan, Jinxin, Jintong PC, etc. were successively traded at a discount of 10 yuan/mt to a premium of 10 yuan/mt ex-factory. Registered SX-EW copper was scarce, with only some Myanmar-origin cargoes available, quoted at a discount of 80 yuan/mt with invoices dated next month.

Looking ahead to tomorrow, from the perspective of regional price spreads, the Shanghai-Guangdong price spread further widened to around 250 yuan/mt during the day, with arbitrage opportunities expanding further. The willingness to divert east China cargoes to south China is expected to strengthen, potentially diverting available cargoes from the Shanghai market and providing marginal support for local spot discounts. In addition, cargoes with invoices dated this month are relatively tight in the current Shanghai spot copper market trading segment, with some suppliers opting to make shipments using cargoes with invoices dated next month. The price spread between cargoes with invoices dated this month and next month remained at 30-40 yuan/mt. Demand side, with copper prices currently moving sideways, downstream enterprises' acceptance of current copper prices may improve somewhat, and ordering willingness is expected to rebound slightly, though procurement remains primarily just-in-time in nature. Overall, driven by the combined effects of mild demand improvement, cross-regional arbitrage, and divergence in invoice structures, spot prices against the SHFE copper 2605 contract are expected to remain at a discount tomorrow.