Shanghai Spot Copper Premiums Continued Weak Trend, Approaching Delivery Limited Downside Room [SMM Shanghai Spot Copper]

SMM May 11 update:

During the morning session, SHFE copper 2605 moved sideways before edging slightly higher. The opening price was 104,250 yuan/mt, after which prices fluctuated between 104,000 yuan/mt and 104,400 yuan/mt. Prices then edged higher, touching a high of 104,730 yuan/mt, with a closing price of 104,680 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 70 yuan/mt to 20 yuan/mt. The import profit margin for SHFE copper against the 2605 contract ranged from a loss of 250 yuan/mt to a loss of 200 yuan/mt.

Intraday, the selling sentiment for copper cathode in Shanghai was 2.73, up 0.02 MoM, while the purchasing sentiment was 2.63, down 0.04 MoM. Historical data can be found in the database. At the start of the morning session, suppliers offered standard-quality copper at premiums of 10-50 yuan/mt. In the first round of quotes, Tiefeng, Xiangguang, and Dajiang PC were offered at a premium of 50 yuan/mt. Suppliers then quickly lowered prices, with standard-quality copper quoted at premiums of 10-40 yuan/mt, among which ONSAN, Dajiang PC, Tiefeng, Jinfeng, Zijin, Jinchuan ISA Yongchang, and Jinchuan ISA were quoted at premiums of 10-30 yuan/mt; JCC and Lufang were quoted at a premium of 40 yuan/mt; Jinguan and Jinxin were quoted at a premium of 50 yuan/mt ex-factory. High-quality copper Jinchuan (plate) was quoted at a premium of 90 yuan/mt. Registered SX-EW copper sources were scarce, with only some Myanmar-origin material in circulation, hence quotes remained firm at parity. Entering the second trading period, suppliers further lowered prices. Standard-quality copper including Jintun PC, Jinguan, and Jinxin actually traded at parity to a premium of 20 yuan/mt; Jinchuan ISA Yongchang was quoted at a discount of 10 yuan/mt; Xiangguang, Lufang, and JCC were quoted at premiums of 20-30 yuan/mt; unregistered copper traded at a discount of 100 yuan/mt.

Outlook for tomorrow: Intraday, suppliers continuously lowered their quotes, with the premium center pulling back from around a premium of 50 yuan/mt in the morning session to around parity, with some brands even showing slight discounts. This reflected limited downstream acceptance of high copper prices, with purchasing driven mainly by rigid demand and insufficient willingness to chase higher prices. The inter-month Contango price spread between futures contracts narrowed, and suppliers' willingness to ship to delivery warehouses weakened somewhat. This Friday is the last trading day for the SHFE copper 2605 contract, and delivery logic is gradually emerging, which is expected to provide floor support for spot premiums and limit further significant downside room for premiums. Overall, Shanghai spot copper premiums against the 2605 contract are expected to maintain current levels tomorrow, continuing the weak consolidation trend, but downside room is expected to be limited under delivery expectations.