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Today, the most-traded BC copper 2603 contract opened at 98,140 yuan/mt. At the start of trading, copper prices touched a high of 101,150 yuan/mt, after which the price center declined sharply. During the morning session, it hit a low of 90,450 yuan/mt, ultimately closing at 91,890 yuan/mt, down 2.85%. Open interest reached 6,460 lots, an increase of 335 lots from the previous trading day, while trading volume reached 26,587 lots, an increase of 12,040 lots from the previous trading day.

The SHFE copper 2603 contract closed at 103,680 yuan/mt. Based on the BC copper 2603 contract's closing price of 91,890 yuan/mt, its post-tax price would be 103,836 yuan/mt. The price spread between the SHFE copper 2603 contract and BC copper stood at -156, maintaining an inverted spread that narrowed compared to the previous day.

According to Polaris Power Network, many regions across the country are gradually phasing out administrative time-of-use electricity prices, and the investment logic of the industrial and commercial ESS sector is consequently undergoing restructuring. Following the withdrawal of administrative time-of-use electricity prices, the electricity market will fully transition to market-based trading. This policy shift not only imposes higher life cycle requirements on industrial and commercial ESS projects but also signifies that technological and business model innovations will become the core drivers for profitability in the industry.

Copper prices experienced significant fluctuations this week, leading copper wire and cable enterprises to adopt a more cautious approach to raw material procurement. They strictly controlled the scale of raw material stockpiling, focusing primarily on just-in-time procurement. Only a few enterprises, driven by fears of rising prices, procured raw materials in advance for stockpiling. As a result, the raw material inventory ratio increased by 1.55% WoW to 13,115 mt. Finished product inventories remained relatively stable, as enterprises mostly followed orders for orderly production scheduling, maintaining a balance between inbound and outbound flows. Overall, a slight destocking trend was observed, with a decrease of 0.74 percentage points WoW to 18,090 mt.

The operating rate of SMM copper wire and cable enterprises was 59.46% this week, up 0.75 percentage points WoW. Production this week was mainly carried out in an orderly manner based on previously retained orders, with the production pace largely consistent with the previous period and no wild swings observed, indicating strong overall production stability in the industry. By sector, orders from State Grid continued to be released, supplemented by scattered small orders in the market, providing additional support for production. However, copper prices hit another record high towards the end of the week, dampening downstream enthusiasm for cargo pick-up. Coupled with the approaching Chinese New Year holiday and weakening market demand, some enterprises have begun planning early holiday arrangements. Therefore, the operating rate is expected to decline by 2.82 percentage points WoW to 56.64% next week.

[SMM Shanghai Spot Copper] Looking ahead to next week, the SHFE copper spot market is expected to remain under pressure. Although intraday copper prices have pulled back from their historical highs, prices remain elevated, which will continue to suppress actual downstream procurement demand and make it difficult to provide effective support for spot cargoes. In terms of market structure, the import arbitrage window is fluctuating around the break-even point. If it remains open, it will introduce overseas supply, increasing domestic supply pressure. Meanwhile, although the inter-month Contango price spread has narrowed slightly, suppliers still have a strong willingness to ship to delivery warehouses, which will continue to divert available spot cargoes. If copper prices fail to decline further next week to effectively stimulate buying interest, the market will likely continue its pattern of "high prices, weak turnover.

【SMM Copper Cathode Rod Express】This week, domestic copper cathode rod raw material and finished product inventories remained generally stable. Raw material procurement and stockpiling proceeded in an orderly manner, with inventories experiencing a slight buildup. Driven by the slowdown in downstream cargo pick-up pace and pre-holiday stockpiling operations by enterprises, finished product inventories saw some accumulation.

[SMM Brass Billet Express] Looking ahead to next week, affected by wild swings in copper prices, some enterprises have planned to halt production early for the holiday. Meanwhile, due to losses from raw material prices and sales, tight raw material supply, coupled with weak end-use demand, SMM expects the industry's operating rate to drop by 1.6 percentage points to around 45.6%.

[SMM Brass Billet Express] The operating rate in the brass billet industry was 47.2% this week, up 0.44 percentage point WoW. Orders remained generally stable during the week, and large enterprises actively produced and delivered orders, driving a slight rise in the operating rate. The industry's raw material inventory stood at 3.78 days, while finished product inventories were at 5.44 days. Enterprises continued active destocking and maintained cautious purchase willingness.

[SMM Copper Express] The front-month contract closed at 104,330 yuan/mt in the afternoon session today, down 3,900 yuan/mt from the previous trading day. In Hubei, secondary copper rod was offered at 102,550–102,650 yuan/mt, at a discount of 1,680–1,780 yuan/mt (average discount of 1,730 yuan/mt) against the front-month contract. Copper prices experienced wild swings, downstream consumption remained weak, and actual trading activity in the market was sluggish.