Futures Market: Overnight, LME copper opened at $9,570.5/mt. After initial fluctuations, it trended lower, hitting a low of $9,478.0/mt during the session. It then fluctuated upward, reaching a high of $9,630.0/mt near the close, and eventually settled at $9,614.0/mt, up 0.99%. Trading volume was 19,904 lots, and open interest was 287,484 lots. Overnight, the SHFE copper 2506 contract opened lower at 77,680 yuan/mt. After initial fluctuations, it trended upward, hitting a high of 78,480 yuan/mt during the session. It eventually settled at 78,390 yuan/mt, up 0.72%. Trading volume was 29,488 lots, and open interest was 151,158 lots, with a daily change in open interest of -1,247 lots and a daily change rate of -0.82%.
[SMM Copper Morning Meeting Summary] News: (1) Zijin Mining announced on the evening of May 23 that multiple mine tremors had recently occurred at the Kakula mine section of its Kamoa-Kakula copper mine. Following a decision by Kamoa Copper's management, underground operations in the area have been suspended.
Spot: (1) Shanghai: On May 23, SMM #1 copper cathode spot premiums against the front-month 2506 contract were reported at 130-200 yuan/mt, with an average premium of 165 yuan/mt, up 30 yuan/mt from the previous trading day. The SMM #1 copper cathode price was 77,930-78,140 yuan/mt. In the morning session, the SHFE copper 2506 contract rose from around 77,800 yuan/mt to 78,000 yuan/mt, briefly touched 78,030 yuan/mt, and then pulled back, closing at 77,890 yuan/mt. The BACK spread between months returned to the 300-330 yuan/mt range, with the center of the premium range moving higher. Currently, there are signs of the spread widening. Next week, as trading for cargoes with invoices dated next month begins, some traders may have a need for cash flow. However, the price spread between front-month and next-month invoices is expected to be 30-40 yuan/mt. It is anticipated that next week's premiums and discounts will stabilize around this week's center. If they fall below 100 yuan/mt, the market may show purchasing sentiment.
(2) Guangdong: On May 23, Guangdong's #1 copper cathode spot premiums against the front-month contract were reported at 180-260 yuan/mt, with an average premium of 220 yuan/mt, up 15 yuan/mt from the previous trading day. SX-EW copper premiums were reported at 120-140 yuan/mt, with an average premium of 130 yuan/mt, up 20 yuan/mt from the previous trading day. The average price of Guangdong's #1 copper cathode was 78,060 yuan/mt, down 30 yuan/mt from the previous trading day, while the average price of SX-EW copper was 77,970 yuan/mt, down 25 yuan/mt from the previous trading day. Overall, inventory levels hit a recent low, and suppliers actively refused to budge on prices, with overall trading activity being moderate.
(3) Imported copper: On May 23, warrant prices were $88-96/mt for QP June, with the average price unchanged from the previous trading day. B/L prices were $94-114/mt for QP June, with the average price down $4/mt from the previous trading day. EQ copper (CIF B/L) prices were $70-80/mt for QP June, with the average price unchanged from the previous trading day. Quotations were based on cargoes expected to arrive in late May and early June. Overall, domestic copper is still expected to dominate arrivals in late May, with non-registered spot orders remaining scarce. However, given the poor performance of the SHFE/LME price ratio, there is expected to be further downside room for premiums.
(4) Secondary copper: On May 23, the price of secondary copper raw materials remained unchanged MoM. The price of bare bright copper in Guangdong was 72,400-72,600 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 867 yuan/mt, down 120 yuan/mt WoW. The price difference between copper cathode rod and secondary copper rod was 945 yuan/mt. According to an SMM survey, a trader engaged in the import of secondary copper raw materials in Ningbo indicated that the supply of secondary raw materials had slightly increased this week. As LME copper prices fell below 9,600 yuan/mt during the week, many suppliers were concerned about expanding losses from price declines, and thus slightly increased their shipments this week. Additionally, regarding the entry of US copper scrap into China through transshipment or exchange, traders stated that they had not heard any related news for the time being. It is expected that a significant decline in import data for US secondary copper raw materials will begin to be reflected in the May data.
(5) Inventory: On May 23, LME copper cathode inventories decreased by 1,800 mt to 164,725 mt. On the same day, SHFE warrant inventories increased by 1,652 mt to 33,406 mt.
Price: On the macro side, copper prices fell last Friday after the US announced plans to impose a 50% tariff on goods from the EU. However, as the US dollar index fell to its lowest level in more than three weeks, copper prices rebounded and continued to rise. Meanwhile, Zijin Mining announced on the evening of May 23 that multiple mine tremors had occurred in succession at the Kakula mine section of the Kamoa-Kakula copper mine owned by the company. Following a decision by the management of Kamoa Copper, underground operations in the area have been suspended, and concerns about the copper mine have also boosted copper prices. Additionally, Trump has now reopened a 90-day window for trade negotiations with the EU. On the fundamental side, the availability of market supply has once again tightened, with signs of a widening price spread between futures contracts and an upward trend in premiums. Downstream consumption remains sluggish amid high copper prices and high premiums. Overall, with the US dollar index running weak, copper prices are expected to find support today.
[The information provided is for reference only. This article does not constitute direct advice for investment research and decision-making. Clients should make cautious decisions and should not rely on this information to replace their own independent judgment. Any decisions made by clients are unrelated to SMM.]
![Copper Inventories in Major Regions of China Continued Destocking During the Week [SMM Weekly Data]](https://imgqn.smm.cn/usercenter/gCNEi20251217171715.jpeg)
