After the nearby month turned into a backwardation, the premium rose. The release of warrants promoted slow destocking in east China [SMM Shanghai spot copper].

Published: Mar 31, 2025 13:42

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【SMM Spot Copper】During the day, mainstream standard-quality copper was quoted at parity to a premium of 20 yuan/mt against the front-month contract, while high-quality copper was quoted at a premium of 10-30 yuan/mt. According to SMM, domestic copper cathode social inventory continued to experience a slight buildup over the weekend, with the increase mainly concentrated in Guangdong. Attracted by the high premiums in Guangdong, some smelters increased shipments to South China, while east China continued to destock. It is expected that a batch of imported copper cathode will arrive in concentrated shipments in the near future, which may hinder the pace of social inventory destocking, and spot premiums are expected to rise slowly before the holiday.

SMM March 31: Today, spot prices of #1 copper cathode against the SHFE copper 2504 contract were quoted at parity to a premium of 30 yuan/mt, with an average premium of 15 yuan/mt, up 20 yuan/mt from the previous trading day. Standard-quality copper traded at 79,860-80,020 yuan/mt, while high-quality copper traded at 79,870-80,030 yuan/mt. The SHFE copper 2504 contract opened lower in the morning session, starting at 80,450 yuan/mt and then following the previous trend downward, breaking through the 80,000 yuan/mt level and testing 79,830 yuan/mt. The price spread between the SHFE copper 2504 and 2505 contracts fluctuated between a backwardation of 10-50 yuan/mt.

Copper prices fell during the day, while downstream consumption improved significantly WoW, driven by rigid demand and structure, pushing premiums higher. At the beginning of the session, suppliers quoted mainstream standard-quality copper against cargoes with invoices dated next month at 0 yuan/mt to a premium of around 20 yuan/mt, while high-quality copper was quoted at a premium of 10-30 yuan/mt. Some suppliers chose to release warrants due to the shift to backwardation and rising premiums, resulting in relatively small fluctuations in premiums and discounts overall. During the main trading session, mainstream standard-quality copper against cargoes with invoices dated next month traded at 0 yuan/mt to a premium of around 20 yuan/mt, while high-quality copper traded at a premium of 10-30 yuan/mt. SX-EW copper traded at a discount of 50 yuan/mt. Spot premiums remained stable until before 11:00 AM.

According to SMM, domestic social inventory of copper cathode continued to build slightly over the weekend, with the increase mainly in Guangdong, as some smelters increased shipments to South China attracted by high premiums in Guangdong, while east China continued to destock. Some imported copper cathodes are expected to arrive in concentrated shipments soon, which is likely to slow the pace of social inventory destocking, and spot premiums are expected to rise slowly before the holiday.

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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