First Quantum's Panama Copper Mine Shutdown Caused $3.5 Billion Loss, LME Copper and SHFE Copper Both Closed Higher Overnight [SMM Copper Morning Meeting Minutes]

2026.5.19 Tuesday
Futures: Overnight LME copper opened at $13,477/mt, dipped to $13,436/mt early in the session, then the price center gradually shifted upward to $13,625/mt, and finally moved sideways at high levels to close at $13,590/mt, up 0.34%, with trading volume at 24,000 lots and open interest at 283,000 lots, an increase of 2,099 lots from the previous trading day, indicating bullish position building. Overnight the most-traded SHFE copper 2606 contract opened at 104,480 yuan/mt, touched a high of 104,840 yuan/mt early in the session, then the price center edged down to a low of 104,440 yuan/mt, and finally moved sideways to close at 104,590 yuan/mt, up 0.28%, with trading volume at 30,000 lots and open interest at 154,000 lots, a decrease of 3,110 lots from the previous trading day, indicating bearish position reduction.
[SMM Copper Morning Meeting Summary] News:
(1) First Quantum Minerals (FQM) stated that the two-year production suspension at its Cobre Panamá (CP) copper mine has cost the country $3.5 billion in economic losses, highlighting the mine's importance to Panama's economy. The Canadian miner stated in its 2025 tax and transparency report that it directly contributed $4.1 billion last year in the countries where its mines are located, bringing its cumulative direct contribution over the past 8 years to $9.6 billion. Last year, FQM contributed $3.5 billion to Zambia's economy. Based on the pre-suspension tax regime, the Panama copper mine, had it not been suspended, should have contributed $1.8 billion to Panama in 2025. This figure includes over $600 million in government revenue, over $250 million in wages, and nearly $930 million in local procurement.
Spot:
(1) Shanghai: On May 18, SMM #1 copper cathode spot prices against the current-month 2606 contract were quoted at a discount of 80 yuan/mt to a discount of 10 yuan/mt, with an average discount of 45 yuan/mt. The SHFE copper 2606 contract showed a pattern of opening low, rebounding, and then moving sideways during the morning session. The opening price was 104,440 yuan/mt, after which prices continued to decline, touching a low of 103,400 yuan/mt, then stabilized and rebounded, fluctuating between 104,100 yuan/mt and 104,450 yuan/mt, with a closing price of 104,250 yuan/mt. The inter-month price spread ranged from Contango 40 yuan/mt to Backwardation 30 yuan/mt, and the import profit margin for SHFE copper against the 2606 contract for the current month ranged from a loss of 210 yuan/mt to a loss of 80 yuan/mt. Intraday SHFE copper prices edged down, effectively activating some downstream buying interest. According to SMM, orders from some downstream processing enterprises increased by about 30% compared to the previous trading day, with some transactions concentrated around 103,500 yuan/mt, indicating that current price levels still held some appeal for end-users. Inventory side, SMM data showed that social inventory in the Shanghai area was recorded at 181,800 mt, down 2,800 mt WoW from last Thursday; inventory in the Jiangsu area was 38,100 mt, up slightly by 1,200 mt WoW from last Thursday. Overall, a slight destocking trend was observed, with inventory pressure marginally easing. From market performance, suppliers' offers remained basically stable, and the transaction center showed no significant downward shift. Overall, supported by demand release stimulated by copper price pullbacks and slight inventory destocking, Shanghai spot copper prices against the 2606 contract are expected to remain at a discount today, continuing a generally stable trend.
(2) Guangdong: On May 18, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 260 yuan/mt, down 10 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 180 yuan/mt, down 20 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 110 yuan/mt, down 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 104,235 yuan/mt, down 1,515 yuan/mt from the previous trading day; the average price of SX-EW copper was 104,160 yuan/mt, down 1,485 yuan/mt from the previous trading day. Overall, copper prices pulled back and downstream procurement increased, with overall trading activity slightly better than last Friday.
(3) Imported copper: On May 18, the average warrant price was flat from the previous trading day at $72/mt (price range $68-76/mt); the average B/L price was flat from the previous trading day at $71/mt (price range $67-75/mt); the average EQ copper (CIF B/L) price fell $3/mt from the previous trading day to $40/mt (price range $36-44/mt), with quotes referencing cargoes arriving in mid-to-late May and early June.
(4) Secondary copper: On May 18 at 11:30, the futures closing price was 104,250 yuan/mt, down 1,770 yuan/mt from the previous trading day; the average spot premium was -45 yuan/mt, up 70 yuan/mt from the previous trading day. On May 18, copper scrap prices decreased 600 yuan/mt MoM, the copper scrap sales sentiment index fell to 2.7, and the procurement sentiment index rose to 2.25. The price difference between copper cathode and copper scrap was 2,976 yuan/mt, down 1,030 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,260 yuan/mt. According to an SMM survey, as copper prices stopped falling and stabilized, procurement sentiment at many secondary copper rod enterprises recovered. While copper scrap traders reported normal shipments during the day, these were mainly previous high-priced historical orders, and transactions for currently low-priced copper scrap among traders remained scarce.
Prices: On the macro front, Trump suspended the originally planned military strike on Iran scheduled for Tuesday, and the softening US dollar index provided support for copper prices. In addition, an Ebola outbreak in the DRC, though not yet affecting core copper mining areas, may trigger market concerns over copper ore supply chain stability. Fundamentals side, on the supply end, imported cargo arrivals were relatively low, while domestic cargo arrivals edged up; on the demand end, affected by the pullback in copper prices, downstream enterprise procurement sentiment recovered, and actual market transaction demand improved marginally. Inventory side, as of Monday May 18, SMM copper inventories in major regions nationwide decreased by 400 mt WoW to 242,900 mt. Overall, copper prices are expected to hold up well with a fluctuating trend 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.]