Middle East Geopolitical Risks Compound Rate Hike Expectations, Overnight LME Copper and SHFE Copper Both Closed Lower [SMM Copper Morning Meeting Summary]

Monday, March 23, 2026
Futures: Last Friday night, LME copper opened at $12,124/mt. Early in the session, copper prices fluctuated rangebound and rose to $12,158/mt, after which the center gradually moved lower. Near the close, prices dipped to $11,833/mt and finally settled at $11,834.5/mt, down 3.09%. Trading volume reached 27,700 lots, and open interest stood at 293,000 lots, up 4,631 lots from the previous trading day, with the overall move mainly reflecting increased short positions. Last Friday night, the most-traded SHFE copper 2605 contract opened at 94,510 yuan/mt and touched a high of 94,700 yuan/mt right after the opening. Copper prices then gradually moved lower, bottoming at 92,820 yuan/mt near the close and finally settling at 93,540 yuan/mt, down 1.26%. Trading volume reached 88,400 lots, and open interest stood at 202,000 lots, up 1,192 lots from the previous trading day, with the day mainly reflecting increased short positions.
[SMM Copper Morning Meeting Summary] News:
(1) Data released by the online query platform of customs statistics showed that China’s imports of copper ore and concentrates were 2,310,344.42 mt in February 2026, down 11.93% MoM and up 5.96% YoY. Chile was the largest source, with imports of copper ore and concentrates from Chile at 747,321.72 mt that month, down 4.27% MoM and down 1.33% YoY. Peru was the second-largest source, with imports of copper ore and concentrates from Peru at 489,372.44 mt that month, down 28.31% MoM and down 20.67% YoY.
Spot:
(1) Shanghai: On the morning of March 20, the SHFE copper 2604 contract rose and then pulled back before fluctuating rangebound. It opened at 95,300 yuan/mt, climbed to a high of 96,230 yuan/mt after the opening, then pulled back and fluctuated between 95,500 yuan/mt and 95,900 yuan/mt, with the closing price at 95,850 yuan/mt. The contango price spread between futures contracts for adjacent months was between 50 yuan/mt and 0 yuan/mt, while the import profit margin for the front-month SHFE copper contract was between a profit of 130 yuan/mt and a profit of 260 yuan/mt. During last night’s session, copper prices opened lower with a gap, and some enterprises placed orders at lower levels to restock. Intraday procurement demand increased somewhat, but considering that restocking had already been concentrated on the previous day, actual incremental buying remained limited. According to data released by SHFE on March 19, SHFE copper warrants decreased by 12,200 mt during the day, confirming that downstream buying the dip picked up after copper prices pulled back, and the center of spot premiums moved higher accordingly. From the market structure perspective, the import profit window widened slightly, and expectations for subsequent inflows of supplies from outside China heated up, which may put some pressure on the supply side. Overall, amid the tug-of-war between faster destocking and supplier selling, Shanghai spot copper premiums are expected to remain at the current level today.
(2) Guangdong: On March 20, spot prices for Guangdong #1 copper cathode against the front-month contract were reported at 110 yuan/mt for high-quality copper, down 40 yuan/mt from yesterday; parity for standard-quality copper, down 20 yuan/mt from yesterday; and a discount of 60 yuan/mt for SX-EW copper, down 20 yuan/mt from yesterday. The average price of Guangdong #1 copper cathode was 95,945 yuan/mt, up 210 yuan/mt from the previous trading day, while the average price of SX-EW copper was 95,830 yuan/mt, up 215 yuan/mt from the previous trading day. Overall, as copper prices stopped falling and rebounded, downstream restocking demand was weaker than yesterday, and spot premiums retreated after a rapid rise.
(3) Imported copper: On March 20, the average warrant price rose $1/mt from the previous trading day to $48/mt (price range: $42-54/mt); the average B/L price rose $1/mt from the previous trading day to $47/mt (price range: $41-53/mt); the average EQ copper (CIF B/L) price rose $2/mt from the previous trading day to $28/mt (price range: $21-35/mt), with quotations referencing cargoes scheduled to arrive from late March to mid-April.
(4) Secondary copper: As of 11:30 on March 20, the futures closing price was 95,620 yuan/mt, down 3,040 yuan/mt from the previous trading day; the average spot premiums stood at -30 yuan/mt, up 60 yuan/mt from the previous trading day. On March 20, copper scrap prices fell 3,200 yuan/mt MoM, the sales sentiment index for copper scrap dropped to 2.34, the purchase sentiment index fell to 2.41, and the price difference between copper cathode and copper scrap was -461 yuan/mt, down 460 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 415 yuan/mt. According to the SMM survey, as copper prices in and outside China pulled back, suppliers of secondary copper raw materials outside China successively raised the coefficient for bare bright copper quotations to 99.5%, while import traders of secondary copper raw materials in China only quoted a coefficient of 98.5%, making transactions generally difficult to conclude.
Prices: On the macro front, geopolitical risks in the Middle East continued to escalate, and news that the US was sending more troops to the region further intensified market concerns over an escalation of the situation, boosting the US dollar. Combined with expectations for US Fed interest rate hikes, this jointly pressured copper prices. Fundamentally, supply side, imported cargoes will continue to arrive, and overall market supply remained ample; demand side, driven by the pullback in copper prices, downstream purchase willingness continued to rebound. Overall, copper prices are expected to remain in the doldrums today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not use this as a substitute for their own independent judgment. Any decisions made by clients are unrelated to SMM.]