Easing U.S.-Iran Tensions Supported Copper Prices, Price Spread Between SHFE Copper and BC Copper Inversion Widened [SMM BC Copper Commentary]

Today, the most-traded BC copper contract 2606 opened at 91,800 yuan/mt, touching the intraday high at the beginning of the session before fluctuating in a wide range. After the daytime session opened, the copper price center shifted downward, dipping to 91,070 yuan/mt, then fluctuated upward, ultimately closing at 91,450 yuan/mt, up 0.75%. Open interest stood at 9,522 lots, an increase of 164 lots from the previous trading day, and trading volume reached 4,909 lots, indicating bulls adding positions. On the macro front, US media reports indicated that the US and Iran were expected to reach a ceasefire first and initiate a 30-day negotiation cycle. Trump released an optimistic attitude toward reaching a deal, significantly cooling geopolitical risk-aversion sentiment. Meanwhile, the Japanese yen exchange rate rose sharply, with the market anticipating that Japan might conduct foreign exchange intervention. Multiple factors drove the US dollar index weaker, providing clear bullish support for copper prices. Fundamentals side, on the supply end, arrivals of domestic sources pulled back somewhat, while imported sources arrived at ports at a slower pace due to logistics disruptions, with overall spot supply maintaining a tight pattern. Demand side, as copper prices continued to fluctuate at highs, downstream enterprises adopted a cautious purchasing mentality. The market was primarily driven by rigid restocking demand, with mediocre speculative purchase willingness.

The SHFE copper 2606 contract closed at 103,000 yuan/mt. Based on the BC copper 2606 contract at 91,450 yuan/mt, its after-tax price was 103,338 yuan/mt. The price spread between the SHFE copper 2606 contract and BC copper was -338, with the inversion maintained and widening compared to the previous day.