Falling SHFE Copper Futures Prices Stimulated Downstream Orders, Driving a Steady Recovery in Spot Discounts [SMM Shanghai Spot Copper]

SMM, March 4:

In early trading, the SHFE copper 2603 contract fluctuated in consolidation before retreating after a rapid rise, then rebounded again late in the session. It opened at 101,340 yuan/mt. After the open, prices fluctuated between 101,350 yuan/mt and 101,660 yuan/mt, then quickly surged to an intraday high of 102,370 yuan/mt. Prices subsequently eased, pulling back to 101,650 yuan/mt, before rising again late in the session. As of the close, the closing price was 102,100 yuan/mt. The contango price spread between futures contracts for the next-month contract ranged from 310 yuan/mt to 250 yuan/mt, and the import profit margin for the current-month SHFE copper was a loss of 500 yuan/mt to 200 yuan/mt.

Intraday, in Shanghai, the sales sentiment for copper cathode was 2.76, down 0.09 MoM, while purchasing sentiment was 2.79, up 0.02 MoM. . At the start of the morning session, suppliers quoted spot discounts for standard-quality copper at 230 yuan/mt to 100 yuan/mt, with SPCC-ILO and SUMIKO-N quoted at discounts of 150 yuan/mt to 100 yuan/mt, and Zhongtiaoshan, Jinchuan ISA, Zijin, and Honglu quoted at discounts of 200 yuan/mt to 190 yuan/mt. Suppliers later slightly lowered prices, with SPCC-ILO, SUMIKO-N, Xiangguang, and HMG-B quoted at discounts of 150 yuan/mt to 100 yuan/mt, and Zhongtiaoshan, Jinchuan ISA, Zijin, and Honglu quoted at discounts of 230 yuan/mt to 220 yuan/mt. High-quality copper, constrained by scarce circulating supply, including Jinchuan (plate), was quoted at discounts of 70 yuan/mt to 50 yuan/mt. Non-registered copper was quoted at discounts of 300 yuan/mt to 280 yuan/mt. Entering the second time window, standard-quality copper prices gradually stabilized with basically no change; Tongguan, Jinguang, and Jinxin were successively traded at quoted discounts of 210 yuan/mt to 170 yuan/mt. Registered SX-EW copper was active but scarce, with only some Myanmar cargoes circulating, quoted at discounts of 250 yuan/mt to 240 yuan/mt.

Looking ahead to tomorrow, Shanghai spot copper discounts are expected to continue a mild recovery. Futures prices edged lower, while downstream enterprise orders increased. From the market structure perspective, the contango price spread between futures contracts narrowed, and suppliers’ willingness to ship to delivery warehouse may decline. Supply side, domestic copper and previously price-locked imported cargoes continued to arrive; coupled with social inventory at elevated levels, overall circulating supply remained ample. Demand side, downstream enterprises continued to advance work and production resumptions, providing support to spot premiums. Overall, spot premiums are showing a pattern of slow recovery and gradual stabilization.