Long-term contract delivery is dominant, spot market activity is sluggish [SMM North China Spot Copper]

[SMM Imported Copper Market] Recently, China’s import parity inversion has been notable, and the backwardation structure of near-term LME contracts has widened. Sellers in the imported copper market have become more active in offering, and coupled with mediocre downstream consumption demand, spot premiums have shown a trend of retreating from highs. However, as the siphon effect from North America persists, imported copper supply replenishment is expected to remain limited in China, keeping spot premiums supported on the downside. In addition, some smelters have export expectations, so China’s subsequent export situation needs to be closely monitored.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, today the SHFE copper price center rose further above 107,000 yuan/mt. High copper prices significantly dampened downstream purchases, and the market was still dominated by rigid demand buying. However, suppliers’ willingness to sell strengthened, and they continuously lowered their offers throughout the day to facilitate deals. As standard-quality copper prices pulled back, downstream purchase willingness improved, and some low-priced cargoes were traded gradually. Meanwhile, available cargoes of high-quality copper and registered SX-EW copper remained scarce, with relatively firm offers providing some support to spot premiums. Overall, against the backdrop of high copper prices suppressing demand and active price cuts by suppliers to sell, Shanghai spot copper prices against the SHFE 2608 contract are expected to remain at a premium tomorrow. The overall center may continue to be in the doldrums, but improved transactions at low prices may limit the extent of further pullbacks in premiums.

There are market reports that the US Federal Communications Commission (FCC) is drafting a ban aimed at prohibiting the import of new models of Chinese data center components, including optical modules. A relevant person in charge of securities affairs at Zhongji Innolight said that the company has taken note of the relevant market information, and after verification, the FCC has not yet issued any restrictive documents in the relevant field. Regarding the impact if the ban is introduced, the relevant person in charge said that since it has not been introduced, no comment will be made for the time being.