US Dollar Index Heats Up Again, Copper Prices Face Resistance in Uptrend [SMM Copper Morning Meeting Summary]

Futures Market: Overnight, LME copper opened at $9,020.5/mt, initially declined to fluctuate rangebound and hit a low of $8,956/mt. It then fluctuated upward, reaching a high of $9,061/mt near the session's end, and finally closed at $9,051/mt, up 0.79%. Trading volume reached 19,000 lots, and open interest stood at 262,000 lots. Overnight, the most-traded SHFE copper 2502 contract opened at 74,300 yuan/mt, initially dipped to 74,220 yuan/mt, then fluctuated upward, reaching a high of 74,830 yuan/mt near the session's end, and finally closed at 74,780 yuan/mt, up 0.46%. Trading volume reached 24,000 lots, and open interest stood at 141,000 lots.
【SMM Copper Morning Brief】News: (1) According to data released by Chilean customs, Chile's copper exports in December totaled 173,435 mt, with exports to China at 59,430 mt, both rebounding MoM. Chile's copper ore and concentrate exports in December totaled 1,131,199 mt, with exports to China at 818,018 mt, both pulling back MoM.
Spot Market: (1) Shanghai: On January 8, mainstream standard-quality copper spot premiums against the front-month contract were quoted at 100-120 yuan/mt, and high-quality copper at 120-140 yuan/mt. Recently, registered warehouse warrants in Shanghai have continued to flow out, dropping below 15,000 mt as of yesterday. The market faces tight availability of circulating cargoes. However, downstream demand in surrounding regions remains weak, with consumption showing mediocre performance. The near-month contango structure remains stable, and premiums are expected to stay flat tomorrow.
(2) Guangdong: On January 8, #1 copper cathode spot premiums against the front-month contract were quoted at 380-420 yuan/mt, with an average premium of 400 yuan/mt, up 70 yuan/mt from the previous trading day. Hydro copper premiums were quoted at 300-340 yuan/mt, with an average premium of 320 yuan/mt, also up 70 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 74,850 yuan/mt, up 185 yuan/mt from the previous trading day, while hydro copper averaged 74,770 yuan/mt, also up 185 yuan/mt. Overall, both inventory and prices increased, but suppliers continued to stand firm on quotes, while actual transactions remained lackluster.
(3) Imported Copper: On January 8, warehouse warrant prices ranged from $66 to $80/mt, QP January, with the average price up $3/mt from the previous trading day. B/L prices ranged from $56 to $70/mt, QP February, with the average price flat from the previous trading day. EQ copper (CIF B/L) prices ranged from $6 to $20/mt, QP February, with the average price down $3/mt from the previous trading day. Quotes referenced cargoes arriving in mid-to-late January and early February. Over the past two days, the SHFE/LME price ratio weakened. Cargoes arriving before the Chinese New Year were quoted high but saw limited transactions. Buyers mainly considered cargoes arriving after the holiday. Bonded warehouse warrants were in undersupply, and transaction prices remained firm.
(4) Secondary Copper: On January 8, secondary copper raw material prices rose by 100 yuan/mt MoM. Guangdong bare bright copper prices ranged from 68,200 to 68,400 yuan/mt, up 100 yuan/mt from the previous trading day. The price difference between primary metal and scrap was 1,780 yuan/mt, up 8 yuan/mt MoM. The price difference between primary and secondary copper rods was 1,210 yuan/mt. According to the SMM survey, some secondary copper rod enterprises have already suspended external quotations, while others that halted production in late December plan to resume operations after the Chinese New Year.
(5) Inventory: On January 8, LME copper cathode inventory decreased by 1,450 mt to 257,000 mt. SHFE warehouse warrant inventory decreased by 801 mt to 13,949 mt.
Prices: Macro side, US December ADP employment data recorded 122,000, below the market expectation of 140,000, marking the lowest level since August 2024. Initial jobless claims last week recorded 201,000, the lowest since the week of February 17, 2024. Signs of a cooling labour market may lead the US to keep interest rates unchanged in January despite persistently high inflation. Additionally, sources revealed that Trump is considering declaring a national economic emergency to justify imposing broad-based tariffs, which boosted the US dollar index and overall capped copper price gains. Fundamentals side, the market faces tight availability of circulating copper cathode cargoes, while downstream demand in Shanghai's surrounding regions remains weak, with overall market transactions showing mediocre performance. Spot premiums/discounts are expected to remain stable. In terms of prices, the December meeting minutes indicated that the time to slow the pace of interest rate cuts has arrived or is near. The US dollar index is expected to remain high, limiting copper price gains.

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【The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided is for reference only and does not constitute direct investment research advice. Clients should make cautious decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.】