KGHM and Freeport Launch Copper Mine Exploration in Chile; LME Copper and SHFE Copper Both Closed Lower Overnight [SMM Copper Morning Meeting Summary]

2026.5.8 Friday
Futures: LME copper opened at $13,380.5/mt overnight and hovered at highs, touching a high of $13,449.5/mt before the center fluctuated downward. It tested a low of $13,283/mt near the end of the session, ultimately closing at $13,323.5/mt, down 0.51%. Trading volume reached 17,000 lots, and open interest reached 272,000 lots, up 4,370 lots from the previous trading day, indicating bears adding positions. The most-traded SHFE copper 2606 contract opened at 103,300 yuan/mt overnight, initially rising to 103,400 yuan/mt before the center fluctuated downward. It dipped to 102,580 yuan/mt near the end of the session, ultimately closing at 102,720 yuan/mt, down 0.27%. Trading volume reached 37,700 lots, and open interest reached 197,000 lots, down 2,022 lots from the previous trading day, mainly reflecting bulls reducing positions.
[SMM Copper Morning Meeting Summary] News:
(1) On May 7 (Thursday), KGHM Chile, a subsidiary of KGHM Polska Miedz SA, signed an earn-in agreement with Minera Freeport-McMoRan South America Limitada, a subsidiary of Freeport-McMoRan Inc. (Freeport), initiating cooperation on a high-potential copper exploration opportunity in northern Chile. The agreement provides a structured framework for conducting early-stage exploration activities and evaluating the geological potential of the area. The area is located in one of Chile's most prospective copper mining regions, supported by favorable geological and geophysical indicators, with strong potential for early-stage assessment.
Spot:
(1) Shanghai: On May 7, the SHFE copper 2605 contract showed a pattern of declining, stabilizing, and rebounding during the morning session. It opened at 103,000 yuan/mt, edged down to 102,930 yuan/mt before rising to a high of 103,150 yuan/mt. Prices then declined, dipping to 102,630 yuan/mt, and consolidated between 102,630 yuan/mt and 102,730 yuan/mt before stabilizing and rising, with a closing price of 102,860 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 90 yuan/mt to 20 yuan/mt. The import profit margin for SHFE copper against the 2605 front-month contract ranged from a loss of 180 yuan/mt to a loss of 70 yuan/mt. Looking ahead, premium quotes were high during the morning session, but market transactions failed to follow through. Suppliers proactively lowered their quotes during the second session, with the premium center shifting notably lower compared to the morning, reflecting limited downstream acceptance of high copper prices and spot premiums amid copper prices fluctuating at highs, with purchases driven mainly by rigid demand. Overall, amid the interplay between suppliers' increased willingness to sell and high prices suppressing demand, Shanghai spot copper prices against the 2605 contract are expected to maintain premiums today.
(2) Guangdong: On May 7, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 270 yuan/mt, flat from the previous trading day; standard-quality copper was quoted at a premium of 190 yuan/mt, up 10 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 120 yuan/mt, flat from the previous trading day. The average price of Guangdong #1 copper cathode was 103,025 yuan/mt, up 475 yuan/mt from the previous trading day; the average price of SX-EW copper was 102,915 yuan/mt, up 470 yuan/mt from the previous trading day. Overall, downstream consumption was tepid amid rising copper prices, and trading activity remained relatively quiet.
(3) Imported copper: On May 7, the average warrant price rose $5/mt from the previous trading day to $69/mt (price range: $62-76/mt); the average B/L price rose $5/mt from the previous trading day to $66/mt (price range: $61-73/mt); the average EQ copper (CIF B/L) price rose $5/mt from the previous trading day to $36/mt (price range: $30-42/mt), with quotes referencing cargoes arriving at ports in early to mid-May.
(4) Secondary copper: On May 7, the 11:30 futures closing price was 102,860 yuan/mt, up 180 yuan/mt from the previous trading day. The average spot premiums were 80 yuan/mt, down 20 yuan/mt from the previous trading day. On May 7, copper scrap prices rose 500 yuan/mt MoM. The copper scrap sales sentiment index rose to 2.52, and the purchase sentiment index rose to 2.19. The price difference between copper cathode and copper scrap was 1,376 yuan/mt, down 398 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,370 yuan/mt. According to an SMM survey, as copper price center shifted upward, many secondary copper rod enterprises still had no intention to restock raw materials. Meanwhile, copper scrap market prices were rather chaotic, with many traders reporting that the tax-inclusive bare bright copper deduction was in the range of 800-1,200 yuan/mt, and market transactions were very scarce.
Prices: Macro perspective, the US and Iran exchanged fire, but this did not break the existing ceasefire framework; additionally, Iran had not yet responded to the US proposal, and the market entered a wait-and-see mode, awaiting clearer signals from subsequent negotiations. Fundamentals side, supply side, domestic cargo arrivals decreased, and imported cargo arrivals at ports were delayed due to logistics disruptions, tightening spot supply in the market; demand side, copper prices fluctuating at highs suppressed downstream enterprises' purchase willingness, and the market was dominated by just-in-need restocking. Overall, copper prices were expected to show a narrow-range fluctuating trend in the doldrums 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 use this as a substitute for independent judgment. Any decisions made by clients are not related to SMM.]