SMM May 12:
SHFE copper 2605 contract moved sideways during the morning session. It opened at 107,200 yuan/mt, then edged down, trading between 106,650-107,100 yuan/mt. Copper prices continued to decline, hitting a low of 106,310 yuan/mt before stabilizing and rebounding, closing at 106,850 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 90-30 yuan/mt. The import profit margin for SHFE copper against the 2605 contract ranged from a loss of 270 yuan/mt to a loss of 190 yuan/mt.
During the day, the selling sentiment for copper cathode in Shanghai was 2.63, down 0.1 MoM, and the purchasing sentiment was 2.46, down 0.17 MoM. Historical data is available in the database. At the start of the morning session, suppliers offered standard-quality copper at discounts of 30 yuan/mt to premiums of 30 yuan/mt. First-round offers for SPCC-ILO, Lufang, Xiangguang, and JCC were at premiums of 10-30 yuan/mt. Dajiang PC, Jinguan, Zhongtiaoshan, Jinfeng, and Zijin were offered at discounts of 20 yuan/mt to parity. Jinchuan ISA Yongchang was offered at a discount of 30 yuan/mt. In the second session, suppliers further lowered prices. High-quality copper Jinchuan (plate) and Jintun plate were offered at premiums of 20 yuan/mt. ONSAN and Zhongtiaoshan were offered at discounts of 40 yuan/mt. Lufang, Xiangguang, and JCC were offered at discounts of 10 yuan/mt. Jinguan, Jintun PC, and Jinxin traded at discounts of 30-20 yuan/mt on an ex-factory basis. Non-registered copper traded at discounts of 160-140 yuan/mt.
Looking ahead, Peru's energy crisis has raised market concerns over copper ore supply, and copper prices surged during the night session. End-users' acceptance of current high copper prices and spot discounts has declined. According to SMM, downstream orders dropped sharply during the day, with purchasing sentiment subdued and buying limited to rigid demand. From market performance, suppliers continuously lowered offers, with spot cargo shifting from premiums to discounts, and the discount range widened. However, as Friday marks the last trading day for the SHFE copper 2605 contract, with delivery approaching, spot discounts are expected to widen under the Contango price spread structure. Suppliers' willingness to ship to delivery warehouse is increasing, and delivery logic is expected to provide bottom support for spot discounts, limiting further downside.
