Supply glut, weak trades grow spot copper discounts

Spot copper was mostly offered at a discount of 90-50 yuan/mt over the SHFE 1808 contract in Shanghai on Thursday July 26. This compared with a discount of 50 yuan/mt to a premium of 20 yuan/mt on July 25.?copper

Sellers grew keener to destock as supplies continued to grow.?However, transaction activities weakened as most long-term supply agreements have been fulfilled.

We believes that some traders may be keen to purchase?if?discounts widened to 100 yuan/mt?on July 27.

At the end of the morning trading session on on July 26, discounts of high-quality copper grew to 60 yuan/mt, from 40-30 yuan/mt, and that of standard-quality cargoes grew to 90-80 yuan/mt, from 70 yuan/mt. Offers for hydro-copper were also lowered to a discount of 140 yuan/mt from 90-80 yuan/mt on July 25.

The SHFE 1808 contract met pressure at 50,000 yuan/mt on?July 26 and closed at 49,940 yuan/mt at the end of morning trading session, up 30 yuan/mt from the same time on July 25.

At noon, high-grade copper traded at 49,870-49,990 yuan/mt and standard-quality copper traded at 49,850-49,950 yuan/mt.

Source: SMM