Delivery Logic Dominated the Market, Coupled With a Widening Price Spread Between Futures Contracts; Shanghai Spot Copper Maintained a Premium [SMM Shanghai Spot Copper]

SMM News, March 11:

In early trading, the SHFE copper 2603 contract fell before stabilizing and rebounding. It opened at 101,440 yuan/mt, then declined all the way after the open to a low of 101,060 yuan/mt. Prices then stabilized and rebounded somewhat, fluctuating between 101,160 yuan/mt and 101,400 yuan/mt, and closed at 101,300 yuan/mt. The intermonth Contango spread was between 360 yuan/mt and 320 yuan/mt, while the import profit margin for the nearby SHFE copper contract showed a loss of between 370 yuan/mt and 290 yuan/mt.

During the day, sales sentiment for Shanghai copper cathode was 2.93, up 0.03 MoM, while procurement sentiment was 2.78, basically unchanged, . At the start of early morning trading, suppliers quoted standard-quality copper at premiums of 10-100 yuan/mt, among which HMG-B, JCC, Lufang and others were quoted at premiums of 80-100 yuan/mt, while Zhongtiaoshan, Zhongjin, Jinfeng, Jinchuan ISA Yongchang and others were quoted at premiums of 10-30 yuan/mt; high-quality copper such as Guixi and Jinchuan (plate) was quoted at premiums of 80-100 yuan/mt; registered SX-EW copper was scarce, with only some Myanmar cargoes circulating, so prices were firm, quoted at a discount of 30 yuan/mt; non-registered copper was quoted at discounts of 100-80 yuan/mt. In the first trading session, spot transactions were completed relatively quickly, and suppliers slightly raised prices, with Zhongtiaoshan, Zhongjin, Jinfeng, Jinchuan ISA Yongchang and others quoted at premiums of 10-30 yuan/mt. In the second trading session, circulating cargoes available in the market were limited, and suppliers showed strong willingness to hold prices firm. Standard-quality copper prices saw little change, while Jinguan, Jinxin, Tongguan, Jinfeng and others were successively traded at quoted premiums of 40-60 yuan/mt; high-quality copper Jinchuan (plate) was traded at premiums of 70-80 yuan/mt.

The intermonth Contango spread continued to widen, strengthening suppliers' willingness to ship to delivery warehouse and further tightening spot cargoes available for circulation, providing strong support for spot premiums. As a result, suppliers showed strong sentiment to hold prices firm during the day, and quotations remained firm. Demand side, downstream buyers maintained just-in-time procurement, providing some support to prices; Supply side, although social inventory remained high, more than half of the cargoes had been converted into warrants, and spot circulation remained tight. Shanghai added 1,759 mt of warrants yesterday, further exacerbating the tightness of circulating cargoes. Overall, under the dominance of delivery logic, Shanghai spot copper premiums are expected to remain in premium territory tomorrow.