High Copper Prices Suppress Consumption Expectations, Shanghai Spot Copper Premiums Under Pressure After Contract Rollover [SMM Shanghai Spot Copper]

SMM April 16:

During the morning session, SHFE copper 2605 opened with a gap-up and then moved sideways, with an opening price of 102,060 yuan/mt. After the open, prices jumped, reaching a high of 102,470 yuan/mt, and moved sideways between 102,260 yuan/mt and 102,470 yuan/mt, with a closing price of 102,300 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 80 yuan/mt to 50 yuan/mt. The import profit margin for SHFE copper against the 2605 contract for the current month was a loss of 500 yuan/mt to 420 yuan/mt.

Intraday, the selling sentiment for copper cathode in Shanghai was 2.77, up 0.12 MoM, and the purchasing sentiment was 2.68, up 0.05 MoM.. At the start of the morning session, suppliers showed strong wait-and-see sentiment. Standard-quality copper including Jinchuan ISA, TG-JL, Zhongtiaoshan PC, and Tiefeng was quoted at premiums of 30-40 yuan/mt. Subsequently, some suppliers offloaded cargo, driving part of the market prices lower, with Jinchuan ISA, Tiefeng, and Dajiang HS quoted at premiums of 10 yuan/mt. Jinguan, Jinxin, and Jintun PC were quoted at premiums of 50 yuan/mt for factory pickup. SPCC-ILO, HMG-B, and Xiangguang were quoted at premiums of 60 yuan/mt. High-quality copper Jinchuan (plate) was quoted at a premium of 80 yuan/mt. Entering the second session, suppliers further lowered prices. Standard-quality copper Xiangguang, JCC, etc. were successively traded at premiums of 30-40 yuan/mt. Jinguan, Jinxin, and Jintun PC were successively traded at premiums of 30-40 yuan/mt. High-quality copper Guixi, Jinchuan (plate), and Jintun plate were successively traded at premiums of 50-70 yuan/mt. Registered SX-EW copper was scarce, with only some Myanmar-origin cargo circulating, so quotes remained firm at a discount of 20 yuan/mt. Non-registered copper was successively traded at a discount of 120 yuan/mt.

Looking ahead to tomorrow, from the perspective of supplier behavior, wait-and-see sentiment was strong in the morning session with notably divergent quotes. Subsequently, some suppliers chose to offload cargo, mainly considering that downstream consumption expectations have weakened after sustained copper price increases, upside room for spot premiums is limited, and willingness to sell has strengthened, driving the overall premiums center lower. On the supply side, attention should be paid to the outflow of unmatched warrants after the contract rollover; if warrants are released in a concentrated manner, this will further suppress spot premiums. On the inventory side, SMM recorded social inventory at 282,800 mt, down 17,000 mt from Monday, with the destocking pace showing a slowdown compared to the earlier period. Overall, under the combined effects of stronger willingness to sell from suppliers and weakening consumption expectations, coupled with warrant outflows, spot premiums against the 2605 contract are expected to edge lower tomorrow.