Easing Geopolitical Risks Boosted Copper Prices, Contango Structure Continued as the Price Spread Narrowed [SMM BC Copper Commentary]

The most-traded BC copper 2604 contract opened at 84,010 yuan/mt, then fluctuated upward to a high of 84,830 yuan/mt. Later, the center of copper prices gradually moved lower, with wide swings after the daytime opening and a bottom at 82,280 yuan/mt, before finally closing at 83,170 yuan/mt, up 1.41%. Open interest stood at 4,945 lots, down 584 lots from the previous trading day, while trading volume reached 6,412 lots, indicating bears reduced positions. Macro perspective, Trump stated that with easing hostilities in the Middle East and progress in related negotiations, he would delay strikes on Iran's energy facilities, and hinted that both sides could jointly manage the Strait of Hormuz. Concerns over geopolitical risks cooled markedly, and the weaker US dollar supported copper prices. Fundamentally, on the supply side, arrivals of domestic and imported cargoes remained steady, with ample market circulation; on the demand side, affected by the pullback in copper prices, downstream purchasing sentiment weakened, and spot consumption softened.

The SHFE copper 2604 contract closed at 94,110 yuan/mt. Based on the BC copper 2604 contract at 83,170 yuan/mt, its after-tax price was 93,982 yuan/mt. The price spread between the SHFE copper 2604 contract and BC copper was 128, and the spread remained in a contango structure, narrowing from the previous day.