Looking ahead to tomorrow, copper prices edged up slightly today. Although buying and selling sentiment rebounded, it remained weak overall. In the morning session, suppliers quoted from parity to a premium of 10 yuan/mt, but actual transactions were sluggish. In the second session, prices were continuously lowered to around a discount of 20 yuan/mt before deals could be concluded, reflecting downstream users' limited acceptance of current copper prices and reluctance to chase higher prices. The inter-month Contango spread widened slightly but stayed in the range of around 100 yuan/mt, with suppliers showing relatively strong willingness to hold prices firm. Close attention should be paid to warrant outflows tomorrow. If there is a concentrated release, it will put pressure on spot premiums; if outflows are limited, then, supported by the spread structure, there is limited room for the discount to widen further. Overall, amid the tug-of-war between weak demand and uncertainty over warrant outflows, Shanghai spot copper prices against the SHFE copper 2607 contract are expected to remain at current levels tomorrow.

[SMM Shanghai spot copper] Looking ahead to tomorrow, today copper prices edged up. Buying and selling sentiment rebounded but remained relatively weak overall. Suppliers quoted from parity to a premium of 10 yuan/mt in early trading, but actual trading was sluggish. In the second session, quotes were continuously lowered to around a discount of 20 yuan/mt before deals could be concluded, reflecting limited acceptance of current copper prices by downstream buyers and insufficient willingness to chase higher prices. The Contango spread between monthly contracts widened slightly but remained around 100 yuan/mt, and suppliers showed relatively strong willingness to hold prices firm. Close attention should be paid to the outflow of warrants tomorrow. If released in concentration, it will weigh on spot premiums; if the outflow is limited, then supported by the spread structure, there is limited room for further decline in the discount. Overall, amid the tug-of-war between weak demand and uncertain warrant outflows, Shanghai spot copper prices against the SHFE copper 2607 contract are expected to remain at current levels tomorrow.

SMM June 17 news: Today, spot Guangdong #1 copper cathode against the front-month contract: high-quality copper was quoted at a premium of 210 yuan/mt, flat with the previous trading day; standard-quality copper was quoted at a premium of 150 yuan/mt, flat with the previous trading day; and SX-EW copper was quoted at a premium of 90 yuan/mt, flat with the previous trading day. The average price of Guangdong #1 copper cathode was 105,500 yuan/mt, up 565 yuan/mt from the previous trading day, and the average price of SX-EW copper was 105,410 yuan/mt, up 565 yuan/mt from the previous trading day. Spot market: Guangdong inventory, after two consecutive increases, finally declined today, mainly due to reduced arrivals and increased shipments. As copper prices rebounded today and some downstream producers had production cuts during the Dragon Boat Festival, their pre-holiday restocking interest was not strong. Suppliers could only maintain yesterday's quotes to sell, but transactions were poor. Today, the purchasing sentiment for copper cathode in Guangdong stood at 2.21, down 0.07 from the previous trading day, while the selling sentiment stood at 2.55, up 0.1 from the previous trading day (historical data can be accessed by logging into the database). Overall, pre-holiday restocking interest was not strong, spot trades were moderate, and no improvement is expected tomorrow.

Spot #1 copper cathode in North China was quoted at a discount of 200-140 yuan/mt against the front-month contract, with an average discount of 170 yuan/mt, down 10 yuan/mt from the previous trading day. The average transaction price was 105,155 yuan/mt, up 575 yuan/mt from the previous trading day.

SMM Morning Meeting Minutes: Overnight, LME copper opened at $13,744/mt, dipped to $13,725/mt shortly after the opening, then its price center fluctuated upward to touch $13,822.5/mt, followed by wild swings and finally closed at $13,796.5/mt, up 0.61%. Trading volume reached 16,600 lots, open interest stood at 263,000 lots, a decrease of 3,509 lots from the previous trading day, manifested as bearish position reduction. Overnight, the most-traded SHFE copper 2607 contract opened at 105,490 yuan/mt, hitting a high of 105,700 yuan/mt right after the opening, then its price center fluctuated downward all the way, touching a low of 105,060 yuan/mt near the end of trading, and finally closed at 105,210 yuan/mt, down 0.14%. Trading volume reached 25,000 lots, open interest stood at 147,000 lots, a decrease of 1,715 lots from the previous trading day, manifested as bullish position reduction.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, SHFE copper prices are expected to rise intraday and remain at a relatively high level. Coupled with the futures contract rollover, trading activity is likely to be muted, reflecting that the current price level is significantly suppressing real demand. After the rollover, the market will officially price around the 2607 contract, and close attention should be paid to the outflow of unmatched warrants. However, open interest for the SHFE copper 2606 contract currently stands at approximately 5,500 lots, indicating limited delivery participation. The concentrated release of warrants is therefore expected to exert relatively limited additional pressure on spot discounts. Supported by delivery-related dynamics, Shanghai spot copper discounts did not see a sharp decline. But if copper prices remain at current highs and demand fails to improve effectively, spot premiums may come under downward pressure.

SMM, June 16: Spot prices of #1 copper cathode in Guangdong against the front-month contract: high-quality copper was reported at a premium of 210 yuan/mt, down 30 yuan/mt from the previous trading day; standard-quality copper at a premium of 150 yuan/mt, down 30 yuan/mt; and SX-EW copper at a premium of 90 yuan/mt, down 30 yuan/mt. The average price of #1 copper cathode in Guangdong was 104,935 yuan/mt, down 875 yuan/mt from the previous trading day, while the average price of SX-EW copper was 104,845 yuan/mt, down 875 yuan/mt. Spot market: Guangdong inventory increased for two consecutive days, primarily due to higher arrivals. Some suppliers, facing pressure to liquidate large inventories, actively lowered prices to sell, causing premiums to decline on the day. Downstream users took advantage of the lower copper prices and premiums to increase procurement volumes. Procurement sentiment for copper cathode in Guangdong was 2.28, up 0.26 from the previous trading day, and shipment sentiment was 2.45, up 0.11 (historical data can be accessed by logging into the database). Overall, as inventory continued to rise, suppliers actively lowered prices to sell, while downstream replenishment increased. Overall trading improved compared to yesterday. Looking ahead, the key focus is on whether arrivals continue to increase.

According to SMM, in May, the operating rate of copper cathode rod enterprises was 67.55%, down 3.64 percentage points MoM, up 0.13 percentage points from expectations, and down 2.65 percentage points YoY. Among them, the operating rate of large enterprises was 78.48%, medium-sized enterprises was 49.95%, and small enterprises was 64.5%. In May, the operating rate of copper cathode rod enterprises was 67.55%, down 3.64 ppts MoM and down 2.65 ppts YoY (70.26% in May last year). Overall, the performance of the copper cathode rod market in May was similar to that in April. As rising copper prices suppressed purchase willingness among downstream processing enterprises, a strong wait-and-see sentiment prevailed in the market, new orders at copper cathode rod enterprises continued to weaken, and order growth was significantly insufficient. Affected by low purchase willingness among downstream clients and a slowdown in the pace of cargo pick-up, finished product inventories at copper cathode rod enterprises continued to build up. Sluggish new orders, coupled with elevated finished product inventories, weighed on production, causing the overall operating rate of China's copper cathode rod enterprises to pull back significantly in May. By downstream sector, due to the rebound in copper prices, operating rates of wire and cable and enamelled wire enterprises also slipped to varying degrees. In May, days of raw material inventories at copper cathode rod enterprises were 2.06 days, and days of finished product inventories were 3.58 days. After copper prices rebounded, copper cathode rod enterprises turned more cautious in procurement, only purchasing as needed. When copper prices corrected, they restocked as needed, driving days of raw material inventories up by 0.21 days MoM. Meanwhile, orders from downstream wire and cable and enamelled wire enterprises showed mediocre performance, with demand continuing to weaken. The speed of picking up goods slowed down compared with the earlier period, pushing days of finished product inventories up by 0.23 days MoM. The operating rate of copper cathode rod enterprises in June is expected to be 66.59%. Looking forward to June, the operating rate of copper cathode rod enterprises is expected to decline by 0.96 percentage points MoM to 66.59%, and down 3.56 percentage points YoY. Although orders on hand can provide short-term support for production and stage-wise support for operating rates, as the market gradually enters the off-season, end-user demand for cables, enamelled wire and other sectors weakens, coupled with concerns over copper price fluctuations, it was originally expected that the operating rate would continue to trend weak. However, recent market conditions have changed. This week, a sharp pullback in copper prices stimulated concentrated price-based procurement by downstream buyers, leading to a significant increase in new orders for copper cathode rod enterprises, far exceeding earlier expectations. With marginal improvement on the demand side, the industry’s June operating rate has the potential to be revised upward and break through the previously pessimistic forecast.

[SMM Shanghai spot copper] During the day, copper prices pulled back, falling to around 104,800 yuan/mt, but remained at a relatively high level. Under the pressure of high copper prices, Shanghai spot copper trading was thin, and premiums widened slightly. Suppliers in Shanghai lowered their offers from a premium of 20 yuan/mt to parity, but transactions remained difficult. Available cargoes in Changzhou were tight, and some deals were done at a premium of 20 yuan/mt.

SMM Morning Meeting Minutes: Overnight, LME copper opened at $13,744/mt, dipped to $13,725/mt shortly after the opening, then its price center fluctuated upward to touch $13,822.5/mt, followed by wild swings and finally closed at $13,796.5/mt, up 0.61%. Trading volume reached 16,600 lots, open interest stood at 263,000 lots, a decrease of 3,509 lots from the previous trading day, manifested as bearish position reduction. Overnight, the most-traded SHFE copper 2607 contract opened at 105,490 yuan/mt, hitting a high of 105,700 yuan/mt right after the opening, then its price center fluctuated downward all the way, touching a low of 105,060 yuan/mt near the end of trading, and finally closed at 105,210 yuan/mt, down 0.14%. Trading volume reached 25,000 lots, open interest stood at 147,000 lots, a decrease of 1,715 lots from the previous trading day, manifested as bullish position reduction.