SMM June 29:
In early trading, the SHFE copper 2607 contract opened low, stabilized, and then gradually climbed. It opened at 102,460 yuan/mt, edged down to tap 102,220 yuan/mt, then traded in a range of 102,310-102,490 yuan/mt before edging lower again to an intraday low of 102,200 yuan/mt. After stabilizing, the price rose steadily to close at 102,880 yuan/mt. The contango spread between the next-month and nearby contracts stood between 70 yuan/mt and 20 yuan/mt, while the import profit margin for SHFE copper against the 2607 contract in the current month ranged from a loss of 480 yuan/mt to a loss of 390 yuan/mt.
On the day, selling sentiment for copper cathode in Shanghai registered 2.65, down 0.15 from the prior session, and buying sentiment was 2.58, down 0.12. Historical data can be accessed in our database. At the open, shipments were thin, and suppliers initially offered standard-quality copper at discounts of 30 yuan/mt to parity. Among these, Lufang and others offered next-month invoice cargoes at parity, while Zhongjin, Zhongtiaoshan, Tiefeng, etc. offered discounts of 30-20 yuan/mt. Subsequently, suppliers lowered quotes modestly. High-quality Jinchuan plate was quoted at a premium of 30 yuan/mt for next-month invoices; Guiye and Jintun plates were quoted at premiums of 40-60 yuan/mt for current-month invoices; Zhongjin, Zhongtiaoshan, Tiefeng, Zijin, etc. were quoted at discounts of 40-20 yuan/mt; and Jinchuan Isa Yongchang was quoted at a discount of 20 yuan/mt for current-month invoices. In the second session, prices saw little change. Dajiang PC, Jinfeng, Zijin, etc. offered current-month invoices at a discount of 10 yuan/mt. Non-registered copper traded at discounts of 210-180 yuan/mt for next-month invoices, while registered SX-EW copper BMK MOOK traded at discounts of 50-40 yuan/mt for current-month invoices.
Looking ahead to tomorrow, on the inventory front, SMM data showed that social inventory in Shanghai was recorded at 134,200 mt, down 4,100 mt WoW from last Thursday, while inventory in Jiangsu stood at 41,200 mt, down 900 mt WoW. Despite some imported arrivals at ports, overall warehouse withdrawals were robust last week, and inventories continued to draw down modestly, providing some support for spot discounts. From a supplier behavior perspective, month-end destocking pressure has largely been released, and market shipments have returned to a normal pace. Intraday supplier quotes were relatively stable, showing no significant downward adjustments, with some suppliers holding a positive view on future premiums/discounts and a strengthening intention to hold prices firm. In terms of invoice structure, current-month invoice cargoes remained relatively tight, and a spread persisted between current-month and next-month invoice cargoes. On balance, with month-end selling over, inventories drawing down, and suppliers holding prices firm, the overall discount center for spot SHFE copper against the 2607 contract is expected to shift slightly higher tomorrow.
