US Fed Governor Waller's hawkish remarks, coupled with escalating geopolitical conflicts, pushed LME copper down slightly overnight, while SHFE copper ended higher [SMM Copper Morning Briefing]

Tuesday, July 14, 2026
Futures: Overnight, LME copper opened at $13,445/mt, initially drifted higher to touch $13,571/mt, then edged down to $13,474/mt, and finally closed at $13,479/mt, down 0.04%, with a trading volume of 21,000 lots and open interest of 247,000 lots, a decline of 172 lots from the previous trading day, attributed to long liquidation. Overnight, the most-traded SHFE copper 2608 contract opened at 103,910 yuan/mt, initially edged up to 104,290 yuan/mt, then drifted lower to touch 103,610 yuan/mt, and finally closed at 103,700 yuan/mt, up 0.58%, with a trading volume of 36,000 lots and open interest of 143,000 lots, an increase of 768 lots from the previous trading day, reflecting long buildup.
[SMM Copper Morning Briefing] News:
(1) According to a report on the website, Mogotes Metals has intersected a thick high-grade interval at the Albor target within the Filo Sur porphyry copper ore project in the Vicuña region, located on the border between Argentina and Chile. Hole FS_DDH_016 intersected 180 meters at a copper grade of 0.51%, gold 0.37 g/t, silver 2.8 g/t, and molybdenum 0.0118% from a depth of 108 meters. This included a 9-meter interval from 276 meters grading copper 1.32%, gold 1.34 g/t, silver 7.5 g/t, and molybdenum 0.0105%. Filo Sur lies along a significant copper-gold belt that also hosts the Filo del Sol project (a joint venture between BHP and Lundin Mining), as well as the Lunahuasi and Los Helados copper mine projects held by NGEx Minerals. Toronto-based Mogotes began exploration work in 2022 across a 100-square-kilometer mining right on the eastern slope of the Andes Cordillera.
Spot:
(1) Shanghai: In early trading on July 13, the SHFE copper 2607 contract opened lower with a gap and then continued to trade weakly. The contract opened at 103,550 yuan/mt, gapped lower after the open, and mainly traded between 103,330 yuan/mt and 103,500 yuan/mt, before declining further. It closed at the day's low of 103,050 yuan/mt. The price spread between the front-month contracts stood at a backwardation of 90-200 yuan/mt, while the import profit margin for SHFE copper against the 2607 contract ranged from a profit of 230 yuan/mt to 490 yuan/mt. Looking ahead to today, SMM recorded Shanghai social inventory at 85,600 mt, down 19,200 mt WoW from last Thursday, while Jiangsu social inventory came in at 26,400 mt, down 4,600 mt WoW, showing rapid destocking. In the past two weeks, social inventory destocking totaled about 60,000 mt, with spot availability remaining persistently tight. According to SMM's understanding, domestic arrivals at some warehouses continued to be low, limiting supply-side growth. The backwardation between the front-month contracts widened sharply to 200 yuan/mt, leaving suppliers facing high costs from shifting their positions, which somewhat boosted their selling sentiment while also coexisting with a willingness to hold prices firm. The import window is wide open, but considering logistics and customs clearance delays, near-term spot market replenishment is likely to be limited. Overall, given the rapid destocking, widening backwardation structure, and suppliers' firm pricing stance, spot prices against the SHFE copper 2607 contract are expected to remain at a premium today.
(2) Guangdong: On July 13, spot #1 copper cathode in Guangdong against the front-month contract: high-quality copper was quoted at 80 yuan/mt, down 30 yuan/mt from the previous trading day; standard-quality copper was at a discount of 10 yuan/mt, down 60 yuan/mt from the previous trading day; SX-EW copper was at a discount of 80 yuan/mt, down 70 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 103,320 yuan/mt, down 710 yuan/mt from the previous trading day, and the average price of SX-EW copper was 103,215 yuan/mt, down 725 yuan/mt from the previous trading day. Overall, copper prices fell but end-use demand was sluggish, suppliers actively lowered prices to sell, and overall trading was subdued.
(3) Imported copper: On July 13, the average warrant price rose $3/mt from the previous trading day to $86/mt (price range $80-92/mt); the average B/L price rose $3/mt from the previous trading day to $85/mt (price range $80-90/mt); the average EQ copper (CIF B/L) price rose $1/mt from the previous trading day to $54/mt (price range $50-58/mt), with quotations referring to cargoes arriving from July to mid-August. On July 13, the SHFE/LME price ratio moved higher, but actual transactions were limited due to still-low available supply in the market. China’s copper cathode social inventory continued to destock sharply, and premiums showed a further upward trend. Market sources reported offers for registered B/Ls in late July at $100/mt, and for mainstream EQ copper in late July to August at around $60/mt.
(4) Secondary copper: On July 13, the futures closing price at 11:30 was 103,160 yuan/mt, down 910 yuan/mt from the previous trading day. Average spot premiums were 215 yuan/mt, up 60 yuan/mt from the previous trading day. Secondary copper raw material prices fell 500 yuan/mt on July 13 from the previous day. The secondary copper raw material sales sentiment index fell to 2.37, while the purchase sentiment index rose to 2.33. The price difference between copper cathode and copper scrap was 2,445 yuan/mt, down 272 yuan/mt from the previous day. The price difference between copper cathode rod and secondary copper rod was 970 yuan/mt. According to an SMM survey, copper prices pulled back, secondary copper raw material holders were less willing to sell, and secondary copper rod enterprises found it difficult to secure low-priced cargoes during the day, with overall transactions relatively sluggish.
Price: On the macro front, US Fed Governor Waller stated that if core inflation heats up again this week, the FOMC will have to consider tightening monetary policy in the near term. Geopolitically, Trump said on Monday that heavy strikes would be launched against Iran tonight and tomorrow, targeting the destruction of Iran’s underground nuclear facilities, but also mentioned the possibility of a deal. Multiple areas in Iran continued to be attacked, with Iran responding by striking US military facilities; Yemen’s Houthis and Saudi Arabia exchanged attacks, and the international airport in Yemen’s capital was hit by airstrikes. Geopolitical conflicts continued to escalate, and coupled with rising inflation expectations, copper prices were under pressure in the short term. Fundamental side, the supply side remained tight overall, with limited imported and domestic arrivals and little incremental supply; the demand side was weak, and after copper prices pulled back, downstream users mainly engaged in rigid restocking, with sluggish purchase willingness. As of Monday, July 13, SMM copper inventories in major regions across China fell by 52,200 mt WoW from the previous Monday to 140,000 mt. Total inventories decreased by 7,600 mt compared to 147,600 mt in the same period last year, with destocking seen in all regions. Overall, copper prices are expected to drift lower in small fluctuations today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and not replace their own independent judgment with this article. Any decisions made by clients have nothing to do with SMM.]