Falling copper prices activate bargain hunting, while the approaching delivery and backwardation structure support SHFE copper premiums [SMM Shanghai spot copper]

SMM June 11 News:

In early trading, the SHFE copper 2606 contract opened higher and held steady. The opening price was 103,470 yuan/mt. After opening, the price first dipped then rose, falling to 103,420 yuan/mt before edging up to a high of 103,720 yuan/mt. It then dropped sharply to 102,710 yuan/mt, stabilized, and rebounded slightly. By the close, the price had recovered to 103,050 yuan/mt. The inter-month spread ranged from Contango 60 yuan/mt to Backwardation 50 yuan/mt. The import profit margin for SHFE copper against the 2606 contract for the current month ranged between a loss of 150 yuan/mt and a loss of 50 yuan/mt.

During the day, selling sentiment for copper cathode in Shanghai was 2.79 and buying sentiment was 2.68, both largely unchanged from the previous day. Historical data is available in the database. Early in the session, suppliers initially quoted standard-quality copper at a discount of 10 yuan/mt to a premium of 30 yuan/mt, with brands such as Dajiang PC, Zhongtiaoshan, Jinchuan ISA, and Zhongjin quoting between a discount of 10 yuan/mt and a premium of 20 yuan/mt, and Lufang, Xiangguang, and JCC quoting premiums of 30-40 yuan/mt. After some cargoes were quickly traded, suppliers raised offers, making low-priced cargoes scarce. Jinguan, Jinxin, and Jintun PC were then offered at an EXW premium of 30 yuan/mt. High-quality copper, including Guixi, Jinchuan plate, and Jintun plate, was quoted at premiums of 60-100 yuan/mt. Entering the second session, suppliers showed strong willingness to hold prices firm. Standard-quality copper such as Dajiang PC and Zijin traded at premiums of 30 yuan/mt, while Jinguan, Jinxin, Jintun PC, and Jinfeng traded at EXW premiums of 20-30 yuan/mt. Non-registered copper traded at discounts of 170-150 yuan/mt.

Looking ahead to tomorrow, the center of copper prices shifted lower during the day, boosting downstream restocking interest on dips, with some processing enterprises reporting a pickup in orders. The inter-month spread structure has flipped from Contango to Backwardation. Returns on holding positions for delivery have risen for suppliers, fueling strong reluctance to sell. Available low-priced cargoes in the market are scarce; after early-session discounted cargoes were quickly absorbed, offers continued to be raised, with premiums for high-quality copper widening to 60-100 yuan/mt. Supply side, SMM recorded Shanghai social inventory of copper cathode at 155,700 mt on June 11, down 11,400 mt from June 8, mainly due to concentrated maintenance at domestic smelters and reduced import arrivals, keeping spot circulation tight. Overall, supported by delivery dynamics, the backwardation structure, and marginal consumption improvement, spot premiums for Shanghai spot copper against the 2606 contract are expected to remain strong overall tomorrow.