Price spread between futures contracts widens, downstream unwilling to purchase; premiums decline with poor transactions [SMM South China spot copper]

SMM, October 13:

Today in Guangdong, spot #1 copper cathode against the front-month contract: high-quality copper was quoted at a premium of 250 yuan/mt, down 100 yuan/mt from the previous trading day; standard-quality copper was quoted at a discount of 50 yuan/mt, down 100 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 110 yuan/mt, down 100 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 111,490 yuan/mt, down 455 yuan/mt from the previous trading day, while the average price of SX-EW copper was 111,280 yuan/mt, down 455 yuan/mt from the previous trading day.

Spot market: Guangdong inventory increased again today, mainly due to higher arrivals and reduced warehouse withdrawals. With the price spread between futures contracts still at 800 yuan/mt, downstream buyers were reluctant to purchase, and suppliers had to keep cutting prices to sell. Standard-quality copper fell from a premium of 50 yuan/mt in early trading to a discount of 50 yuan/mt, but even so, transactions remained poor. Today, the purchasing sentiment for copper cathode in Guangdong was 2.53, down 0.2 from the previous trading day, while the selling sentiment was 2.75, down 0.24 from the previous trading day (historical data can be queried in the database).

Overall, the wide price spread between futures contracts discouraged downstream purchases, and premiums declined with weak transactions.