Uganda Plans to Build Railway to Open New Mineral Route, Copper Prices Rise Overnight as US Strikes Iran [SMM Copper Morning Meeting Summary]

March 2, 2026, Monday
Futures: On Friday evening, LME copper opened at $13,474.5/mt. In the early session, it fluctuated rangebound and rose to $13,527/mt. Subsequently, the center of copper prices gradually moved downward and approached the close, dropping to $13,290/mt. It finally closed at $13,296/mt, up by 0.28%. The trading volume reached 25,300 lots, and the open interest reached 315,000 lots, decreasing by 497 lots from the previous trading day, primarily due to bears reducing their positions. On Friday evening, the most-traded SHFE copper 2604 contract opened at 104,230 yuan/mt. In the early session, it immediately rose to 104,520 yuan/mt, and then fluctuated downward all the way, reaching a low of 103,100 yuan/mt. It finally closed at 103,280 yuan/mt, up by 0.45%. The trading volume reached 77,700 lots, and the open interest reached 202,000 lots, decreasing by 2,150 lots from the previous trading day, showing bears reducing their positions.
[SMM Morning Copper Meeting Summary] News:
(1) Uganda hopes that a new railway line under construction will connect with a railway line being built in neighboring Tanzania, potentially opening up a new route for the export of iron ore, copper, and gold. Uganda currently exports bulk commodities through the port of Mombasa in Kenya and has announced plans to connect its Standard Gauge Railway with a railway under construction in Kenya, with this plan progressing. Uganda had not previously mentioned connecting the railway with Tanzania's railway network and the port of Dar es Salaam. According to documents from Uganda's Ministry of Works and Transport, this railway line will start from the border with Tanzania, pass through its southern and southwestern regions, and end at Mpondwe, a border town with the DRC. "The main purpose of this project is to connect the vast and mineral-rich border areas between Uganda and Tanzania with the port of Dar es Salaam, thereby saving time and transportation costs," the documents stated.
Spot:
(1) Shanghai: On February 27, SMM #1 copper cathode spot prices against the nearby 2603 contract were quoted at discounts of 320 yuan/mt to 200 yuan/mt, with an average of discounts of 260 yuan/mt, down by 25 yuan/mt from the previous trading day; SMM #1 copper cathode prices were 101,710-102,250 yuan/mt. In the morning session, the SHFE copper 2603 contract fluctuated rangebound, opening at 102,020 yuan/mt. After opening, the price dropped slightly to a low of 101,820 yuan/mt, then began to rise, reaching 102,450 yuan/mt before falling again. After a slight drop to 102,170 yuan/mt, it rose again, reaching a high of 102,500 yuan/mt, and then fell slightly, closing at 102,180 yuan/mt. The Contango price spread between futures contracts ranged from 430 yuan/mt to 360 yuan/mt, and the import profit margin for nearby SHFE copper was between losses of 800 yuan/mt and 700 yuan/mt. Looking ahead to this week, the supply side of SHFE spot copper continues to increase, with some Peruvian and Japanese sources visible during the day. From a market structure perspective, the Contango price spread between futures contracts has slightly widened, and suppliers' willingness to ship to delivery warehouse continues, further diverting spot liquidity. Although suppliers have a strong willingness to hold prices firm during the day, and some brands' quotes remain stable, the expectation of subsequent outflows of warrants still exists, which will further pressure spot premiums/discounts. On the demand side, downstream industries have not yet fully resumed production, and procurement sentiment has rebounded but remains cautious. Under the supply-demand mismatch pattern, social inventory continues the trend of inventory buildup. Overall, dominated by supply pressure, spot discounts are expected to remain under pressure this week.
(2) Guangdong: On February 27, spot #1 copper cathode against the front-month contract in Guangdong was at a discount of 230-30 yuan/mt, with an average discount of 130 yuan/mt, up 55 yuan/mt from the previous day; SX-EW copper was quoted at a discount of 310-270 yuan/mt, with an average discount of 290 yuan/mt, up 40 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 101,955 yuan/mt, down 230 yuan/mt from the previous trading day, and the average price of SX-EW copper was 101,795 yuan/mt, down 245 yuan/mt from the previous trading day. Overall, procurement volume by downstream enterprises continued to increase, slowing inventory growth, which stimulated spot premiums to rise continuously.
(3) Imported Copper: On February 27, warrant prices were $45-55/mt, QP March, with the average price unchanged from the previous trading day; B/L prices were $42-52/mt, QP March, with the average price also unchanged from the previous trading day. EQ copper (CIF B/L) was priced at $15-23/mt, QP March, with the average price unchanged from the previous trading day. Prices referenced cargoes arriving in late February and early March.
(4) Secondary Copper: At 11:30 on February 27, futures closed at 102,180 yuan/mt, up 80 yuan/mt from the previous trading day. The average spot premiums and discounts were -260 yuan/mt, down 25 yuan/mt from the previous trading day. On February 27, the price of copper scrap rose 200 yuan/mt MoM. The average price of bare bright copper in Guangdong was 90,300 yuan/mt, up 200 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 2,689 yuan/mt, down 165 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,155 yuan/mt. According to the SMM survey, copper prices surged near the end of the session, but due to limited resumption of production, there was no significant impact on the market price of copper scrap, and trading remained sluggish.
Prices: Macro perspective, US PPI data exceeded expectations, intensifying inflation concerns, and the US dollar index fell, boosting copper prices. The situation in the Middle East escalated suddenly, with the US military launching strikes against Iran, resulting in significant casualties on both sides. Trump claimed to have destroyed high-level targets in Iran and expressed willingness to engage in dialogue with Iran's new leadership. As a major global copper exporter, the instability in Iran has increased shipping risks in the Strait of Hormuz, coupled with rising oil prices, affecting global copper supply and logistics costs. Additionally, Trump is pushing for a Supreme Court review of his tariff policies, leaving trade policy uncertainties. Fundamentally, the supply side saw some replenishment of imported sources, and subsequent deliveries of delivery warrants will further ease overall supply. On the demand side, downstream enterprises are gradually resuming production post-holiday, and consumption is slowly recovering. In summary, under the backdrop of macroeconomic support and geopolitical risks, copper prices are expected to continue their upward trend today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions, and clients should make prudent decisions and not replace their independent judgment with this. Any decision made by the client is unrelated to SMM]