Declining Copper Prices Stimulated Consumption, Converging Price Spread Between Futures Contracts Supported Narrowing of Shanghai Spot Copper Discounts [SMM Shanghai Spot Copper]

Published: Jun 4, 2026 14:08

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[SMM Shanghai Spot Copper] Copper prices shifted lower during the session, with end-use consumption picking up slightly. According to SMM, downstream buyers mostly placed orders and completed transactions in the range of 105,000-105,500 yuan/mt, with trading conditions improving compared to yesterday. In terms of market structure, the inter-month Contango price spread between futures contracts narrowed slightly to 100-50 yuan/mt. Driven by delivery logic, suppliers strengthened their willingness to hold prices firm, pushing spot discounts to narrow. On the inventory front, SMM data showed that social inventory of copper cathode in Shanghai was recorded at 169,800 mt, down 6,900 mt from June 1, showing a slight destocking trend, mainly due to moderate consumption coupled with reduced arrivals. Overall, under the combined effects of demand stimulated by copper price pullbacks, price spread convergence between futures contracts supporting firm pricing, and destocking, spot prices against the SHFE copper 2606 contract are expected to see discounts narrow further tomorrow.

SMM June 4 update:

During the morning session, the SHFE copper 2606 contract exhibited a "V"-shaped trend overall. The opening price was 105,620 yuan/mt. After opening, prices continued to decline, hitting a low of 105,000 yuan/mt, before rebounding in a volatile fashion to reach a high of 106,990 yuan/mt. Prices pulled back slightly toward the close, with the closing price at 106,920 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 100-50 yuan/mt. The import profit margin for SHFE copper against the 2606 contract for the current month ranged from a loss of 670 yuan/mt to a loss of 530 yuan/mt.

Intraday, the selling sentiment for copper cathode in the Shanghai region was 2.7, up 0.11 MoM, and the purchasing sentiment was 2.64, up 0.11 MoM. Historical data can be accessed via the database. At the start of the morning session, suppliers offered standard-quality copper at discounts of 100-60 yuan/mt, with Xiangguang, Lufang, and JCC quoting discounts of 60-50 yuan/mt, while Dajiang PC, Zhongtiaoshan, Xikuang, and Yuguang quoted discounts of 100-90 yuan/mt. Suppliers then quickly lowered prices, with Lufang, Xiangguang, and JCC offering discounts of 80-70 yuan/mt; Jinguan, Jinxin, Jintun PC, and Jinfeng quoting ex-factory discounts of 80 yuan/mt; and Zhongtiaoshan, Yuguang, and Zhongjin offering discounts of 110-90 yuan/mt. High-quality copper from Guixi and Jintun large cathodes were quoted at premiums of 20-30 yuan/mt. Entering the second session, suppliers showed a strong willingness to hold prices firm, with little change in prices. Jinguan, Jinxin, and Jintun PC were successively transacted at ex-factory discounts of 100-80 yuan/mt, while non-registered copper was successively transacted at discounts of 280-260 yuan/mt.

Intraday, the copper price center shifted lower, and end-use consumption picked up slightly. According to SMM, downstream buyers mostly placed orders and transacted in the 105,000-105,500 yuan/mt range, with transaction activity improving compared to the previous day. Market structure side, the inter-month Contango price spread between futures contracts narrowed slightly to 100-50 yuan/mt. Driven by delivery logic, suppliers' willingness to hold prices firm strengthened, pushing spot discounts to narrow. Inventory side, SMM data showed that social inventory of copper cathode in the Shanghai region was recorded at 169,800 mt, down 6,900 mt from June 1, showing a slight destocking trend, mainly due to moderate consumption coupled with reduced arrivals. Overall, driven by the combined effects of copper price pullbacks stimulating demand, narrowing price spreads supporting firm pricing, and destocking, Shanghai spot copper is expected to see discounts against the 2606 contract narrow further tomorrow.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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