High copper prices and premiums suppressed downstream consumption, and overnight LME and SHFE copper both edged lower slightly [SMM Copper Morning Meeting Minutes]

Thursday, 2026-07-23
Futures: Overnight, LME copper opened at 13,883.5 $/mt, touched a high of 13,888 $/mt early in the session, then drifted lower throughout, dipping to a low of 13,800 $/mt near the end, and finally closed at 13,806.5 $/mt, a decline of 0.17%. Trading volume reached 19,200 lots, and open interest was 246,000 lots, an increase of 1,752 lots from the previous trading day, reflecting an increase in bearish positions. Overnight, the most-traded SHFE copper 2609 contract opened at 106,000 yuan/mt, touched a high of 106,190 yuan/mt early, then its price center shifted lower to dip to 105,810 yuan/mt, swung wildly, and finally closed at 105,940 yuan/mt, a decline of 0.16%. Trading volume was 26,600 lots, and open interest was 224,000 lots, a decrease of 3,512 lots from the previous trading day, reflecting a decrease in bullish positions.
[SMM Copper Morning Brief] News:
(1) According to a report by Mining Weekly, Awalé Resources, listed on the Toronto Venture Exchange, reported the first sample assay results from deep drilling at the BBM copper-gold deposit at its Odienné project in the Republic of Côte d'Ivoire, confirming a high-grade core beneath the current open pit and indicating that this will form the underground portion of the deposit. The two holes reported were the first two of 12 holes located beneath and beyond the open-pit mineral resource. The first two holes drilled encountered intense gold mineralization beneath the BBM open pit, confirming the deposit extends at depth.
Spot:
(1) In Shanghai, on the morning of July 22, the SHFE copper 2608 contract trended lower then stabilized and rebounded. It opened at 106,640 yuan/mt, drifted lower after the open, dipped to a low of 106,080 yuan/mt during the session, then stabilized and edged up, closing at 106,340 yuan/mt. The backwardation of the next-month spread ranged from 70 to 120 yuan/mt, and the import profit margin for SHFE copper against the 2608 contract for the current month was between losses of 630 yuan/mt and 520 yuan/mt. Looking ahead to today, the night session of the SHFE copper 2608 contract is expected to rise further, largely trading between 106,000 and 106,800 yuan/mt. With the recent simultaneous increase in copper prices and spot premiums, and the SHFE contract structure maintaining a backwardation, downstream purchasing willingness has weakened clearly, with transactions primarily based on immediate needs. According to SMM, due to high copper prices and the accumulation of finished product inventories, some downstream processing enterprises plan to cut production or temporarily shut down, and the impact of weakening end-use consumption on the spot market is gradually emerging. From the perspective of suppliers' behavior, the day's selling activities dragged the center of premiums lower. Overall, under the combined effect of high copper prices and premiums suppressing downstream demand, along with an increased willingness to sell among suppliers, spot premiums for SHFE copper against the 2608 contract today are expected to be maintained, with the overall center likely to edge down slightly.
(2) Guangdong: On July 22, Guangdong #1 copper cathode spot against front-month contract: high-quality copper quoted at 200 yuan/mt, up 30 yuan/mt from the previous trading day; standard-quality copper quoted at a premium of 140 yuan/mt, up 60 yuan/mt from the previous trading day; SX-EW copper quoted at a premium of 80 yuan/mt, up 60 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 106,470 yuan/mt, up 1,605 yuan/mt from the previous trading day, and the average price of SX-EW copper was 106,380 yuan/mt, up 1,620 yuan/mt from the previous trading day. Overall, copper prices and premiums both moved higher, but spot trades were weak.
(3) Imported copper: On July 22, the average warrant price rose $6/mt from the previous trading day to $115/mt (range: $110-$120/mt); the average B/L price rose $4/mt to $112/mt (range: $108-$116/mt); the average price of EQ copper (CIF B/L) rose $5/mt to $79/mt (range: $75-$83/mt), with offers referencing cargoes arriving from mid-to-late July to late August.
(4) Secondary copper: On July 22, at 11:30, the futures closing price was 106,340 yuan/mt, up 1,410 yuan/mt from the previous trading day. The average spot premium was 395 yuan/mt, down 75 yuan/mt from the previous trading day. On July 22, secondary copper raw material prices rose 600 yuan/mt from the previous trading day. The sales sentiment index for secondary copper raw materials rose to 2.60 and the purchase sentiment index rose to 2.35. The price difference between copper cathode and copper scrap was 4,444 yuan/mt, up 699 yuan/mt from the previous trading day. The price difference between copper cathode rod and secondary copper rod was 1,800 yuan/mt. According to SMM survey, copper prices retreated after rapid rise but remained at high levels. Suppliers of copper scrap actively shipped cargoes, with some even taking short positions in the market. Secondary copper rod enterprises also engaged in arbitrage based on the cathode-scrap price spread, purchasing significant amounts of copper scrap. Intraday market transactions were relatively active.
Prices: On the macro front, Iran denied Trump's claim that Tehran had requested negotiations, calling it "baseless." US Secretary of State Rubio expressed willingness to seek a diplomatic solution but pointed to a lack of sincerity from Iran. Trump threatened that if Iran attacked ships in the Strait of Hormuz, the US would destroy its bridges or power plants. Iran's military responded that if the US carried out its threat, it would cut off all oil flows in the Gulf region and strike regional energy and economic infrastructure. Additionally, Trump anticipated a federal government shutdown in September, and overnight copper prices consolidated. On the fundamentals side, some suppliers increased shipments, but registered SX-EW copper supply was scarce, resulting in an overall structurally tight situation; demand side, high copper prices, high premiums, and the off-season led to persistently weak downstream procurement. Overall, copper prices today are expected to consolidate on a subdued note.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions prudently and not use this as a substitute for their own independent judgment. Any decisions made by the client are unrelated to SMM]