Middle East Conflict Drives Up Codelco Copper Costs

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, tomorrow will be the last trading day of the SHFE copper 2604 contract. In accordance with the SMM #1 copper cathode price assessment methodology, SMM consistently quotes against the front-month contract. In terms of market structure, copper prices rose during the day, but the inter-month contango price spread between futures contracts maintained a certain width, and suppliers showed some willingness to hold prices firm. According to SMM, after copper prices returned above the 100,000 yuan/mt mark, orders from downstream enterprises declined notably, and demand-side support weakened somewhat. In addition, some suppliers had already begun making tentative offers against the next-month contract during the day. Since SMM consistently quotes against the front-month contract, based on the price spread conversion, the passive premium room after the contract rollover is limited. Spot prices against the front-month contract are expected to be at a slight premium or near parity tomorrow.