Geopolitical Risks and Rate Hike Expectations Put Pressure, Copper Prices Move Sideways in Tug-of-War between Longs and Shorts [SMM Copper Morning Meeting Summary]

Monday, July 13, 2026
Futures: Last Friday evening, LME copper opened at $13,490/mt, edged down slightly to $13,453.1/mt in early trading, then drifted higher to touch a high of $13,520/mt, and ultimately closed at $13,484.5/mt, up 0.03%. Trading volume reached 14,000 lots, and open interest stood at 248,000 lots, an increase of 762 lots from the previous trading day, driven by long additions. Last Friday, the most-traded SHFE copper 2608 contract opened at 103,540 yuan/mt, edged up slightly to 103,960 yuan/mt in early trading, then drifted lower to touch a low of 103,400 yuan/mt, and ultimately closed at 103,790 yuan/mt, up 0.08%. Trading volume reached 22,000 lots, and open interest stood at 147,000 lots, a decrease of 1,953 lots from the previous trading day, driven by short covering.
[SMM Copper Morning Brief] News:
(1) According to Mining.com, Chile's lithium export value nearly tripled YoY in H1, driven by rising prices and strong global demand. Data released by Chile's central bank on Wednesday showed that lithium exports reached $3.2 billion in the first six months, nearly three times the level in the same period last year and 34.4% higher than the total export value in 2025. Lithium carbonate posted the largest increase, followed by lithium sulfate and lithium hydroxide. Total export value rose 20.4% to $36.9 billion. "Demand remains strong because lithium is a critical material for EVs, energy storage, appliances, AI-related technologies, and data centers," the Chilean government stated.
Spot:
(1) Shanghai: On July 10, SMM #1 copper cathode spot premiums against the current 2607 contract were quoted at 130-180 yuan/mt, with an average of 155 yuan/mt, up 5 yuan/mt from the previous trading day, hitting a new high for the year. In early trading, the SHFE copper 2607 contract consolidated twice before rallying. It opened at 103,890 yuan/mt, then mostly traded between 103,800 and 103,950 yuan/mt, before rapidly rallying to trade mainly between 103,920 and 104,100 yuan/mt. After another period of consolidation, prices continued to rise, touching an intraday high of 104,160 yuan/mt. Prices edged down slightly before the close, ending at 104,010 yuan/mt. The Back price spread between the next-month and current-month contracts ranged from 20 to 90 yuan/mt, and the import profit margin for SHFE copper against the 2607 contract was between a loss of 30 yuan/mt and a profit of 30 yuan/mt. Looking ahead today, the price spread between the next-month and current-month contracts has fully shifted into a backwardation structure, with the Back spread widening to 20-90 yuan/mt. Suppliers are holding back from selling, and social inventory continues to destock rapidly, keeping available spot copper tight. Overall, with support from the backwardation structure, inventory destocking, and supplier reluctance to sell, spot premiums for SHFE copper against the 2607 contract are expected to persist today, maintaining a strong tone. Attention should be paid to changes in the market structure around delivery and downstream restocking pace.
(2) Guangdong: On July 10, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 110 yuan/mt, up 10 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 50 yuan/mt, up 10 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 10 yuan/mt, up 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 104,030 yuan/mt, up 1,555 yuan/mt from the previous trading day, and the average price of SX-EW copper was 103,940 yuan/mt, up 1,565 yuan/mt from the previous trading day. Overall, suppliers sought to hold prices firm to sell, but downstream was unreceptive, and trading was quiet overall.
(3) Imported Copper: On July 10, the average warrant price rose $1/mt from the previous trading day to $83/mt (price range: $76-90/mt); the average B/L price remained flat from the previous trading day at $82/mt (price range: $74-90/mt); the average EQ copper (CIF B/L) price rose $1/mt from the previous trading day to $53/mt (price range: $49-57/mt), with quotes referencing cargoes arriving from mid-July to August.
(4) Secondary Copper: At 11:30 on July 10, the futures closing price was 104,070 yuan/mt, up 1,730 yuan/mt from the previous trading day. The average spot premium was 155 yuan/mt, up 5 yuan/mt MoM. Today, copper scrap prices rose 600 yuan/mt MoM. The secondary copper raw material sales sentiment index rose to 2.41, and the purchase sentiment index fell to 2.29. The price difference between copper cathode and copper scrap was 2,717 yuan/mt, up 1,065 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,320 yuan/mt. According to the SMM survey, with copper prices rising, China's copper scrap holders actively shipped, but the price difference between copper cathode rod and secondary copper rod only widened by 630 yuan/mt from yesterday, with economic benefits just starting to emerge. End-use consumption orders slightly recovered. However, the high-price selling behavior of copper scrap holders made many secondary copper rod enterprises reluctant to purchase at high levels. Before the futures market closed in the afternoon, secondary copper rod enterprises had already stopped pricing with copper scrap traders, and intraday transactions were mediocre.
Prices: On the macro front, the renewed Middle East conflict intensified inflation concerns, while the US Fed's semi-annual report confirmed that inflation accelerated further in the spring and expressed readiness to use all tools to achieve its dual mandate, reinforcing market expectations for monetary policy tightening. Geopolitically, the US military launched two airstrikes on Iranian facilities. Trump said Iran had agreed to a "perfect deal" yesterday but then opened fire shortly after. Iran struck multiple US facilities and announced the closure of the Strait of Hormuz, though the US military claimed the southern waterway remained "open." The US-Iran conflict escalated sharply, with Israel not yet involved, and Oman proposed a "dual-lane" management approach for strait passage, but the overall situation trended toward tension. Pressured by rising inflation expectations and soaring geopolitical risks, copper prices were under pressure in the short term. Fundamentals side, the supply side was overall tight, mainly due to limited arrivals of imported and domestic cargoes. Demand side, downstream purchases increased when copper prices pulled back, but transactions weakened again after the rebound, with restocking mostly on a need-to basis. In summary, copper prices are expected to drift slightly lower today.
[The information provided is for reference only. This document does not constitute direct investment research decision-making advice. Clients should make prudent decisions and not use this as a substitute for independent judgment. Any decisions made by the client are unrelated to SMM.]