Slightly Widening Price Spread Between Futures Contracts Bolstered Efforts to Hold Prices Firm, Spot Copper Discounts on SHFE Copper Moved Sideways [SMM Shanghai Spot Copper]

SMM May 21 News:

Today, SMM #1 copper cathode spot prices against the current month 2606 contract were quoted at a discount of 110 yuan/mt to a premium of 30 yuan/mt, with an average quote at a discount of 40 yuan/mt. In early trading, the SHFE copper 2606 contract retreated after a rapid rise before stabilizing and rebounding, largely trading between 104,700 yuan/mt and 105,500 yuan/mt, with a closing price of 104,930 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 100 yuan/mt to 60 yuan/mt, and the import profit margin for SHFE copper against the 2606 current month contract ranged from a loss of 270 yuan/mt to a loss of 180 yuan/mt.

Intraday, the selling sentiment for copper cathode in Shanghai was 2.72, up 0.02 MoM, while the procurement sentiment was 2.61, down 0.04 MoM. Historical data can be found in the database. At the opening of early trading, suppliers quoted standard-quality copper at a discount of 100 yuan/mt to a discount of 50 yuan/mt, with Lufang, Xiangguang, and JCC quoted at a discount of 80 yuan/mt to a discount of 70 yuan/mt; Tiefeng, Jinfeng, Zhongtiaoshan, Dajiang PC, Zijin, Yuguang, and Jinchuan ISA Yongchang quoted at a discount of 100 yuan/mt to a discount of 80 yuan/mt; Jinguan, Jinxin, and Jintun PC were quoted at a discount of 70 yuan/mt for factory pick-up; high-quality copper was scarce, so quotes remained firm, with Jinchuan high-purity and Jintun plate quoted at a premium of 20 yuan/mt; registered SX-EW copper was also scarce, with SPENCE and CHUQUI-P quoted at a discount of 120 yuan/mt to a discount of 110 yuan/mt. Entering the second session, suppliers slightly lowered prices on some cargoes, with standard-quality copper ONSAN and Zijin quoted at a discount of 120 yuan/mt to a discount of 110 yuan/mt; high-quality copper Guiye, Jinchuan (plate), and Jintun plate transacted at a premium of 10 yuan/mt to a premium of 30 yuan/mt; non-registered copper transacted at a discount of 260 yuan/mt to a discount of 240 yuan/mt.

Outlook for tomorrow: the inter-month Contango price spread between futures contracts is expected to slightly widen, and suppliers' willingness to hold prices firm is expected to strengthen. Intraday, downstream enterprises bid on some standard-quality copper at a discount of 120 yuan/mt, but suppliers held prices firm and held back from selling, and discounts did not widen significantly. Demand side, affected by high copper prices, end-users' cargo pick-up pace slowed down, finished product inventories at some processing enterprises rose, and procurement volume declined. Overall, given weak demand, Shanghai spot copper premiums against the 06 contract are expected to remain at a discount tomorrow.