Indonesia Warned to Revoke Mining Licenses for Failure to Submit RKAB; LME Copper and SHFE Copper Both Closed Higher Overnight [SMM Copper Morning Meeting Minutes]

2026.5.21 Thursday
Futures: Overnight LME copper opened at $13,477.5/mt, dipped to $13,461/mt in early trading, then the price center gradually shifted upward to $13,676/mt, and finally closed at $13,654.5/mt, up 1.69%, with trading volume at 17,000 lots and open interest at 273,000 lots, down 3,375 lots from the previous trading day, indicating bears reducing positions. Overnight the most-traded SHFE copper 2606 contract opened at 103,950 yuan/mt, touched a low of 103,950 yuan/mt at the open, then the price center shifted upward to a high of 105,190 yuan/mt, and finally closed at 105,030 yuan/mt, up 1.04%, with trading volume at 37,000 lots and open interest at 133,000 lots, down 3,198 lots from the previous trading day, indicating bears reducing positions.
[SMM Copper Morning Meeting Summary] News:
(1) Indonesia's Ministry of Energy and Mineral Resources (ESDM) emphasized that it would not hesitate to impose severe sanctions of revoking business licenses (IUP) on mining companies that failed to submit their 2026 Annual Work Plan and Budget (RKAB) on time. Director General Tri Winarno set a 90-day deadline for companies to complete and submit this critical document. However, if no clear progress is made beyond the deadline, the government is prepared to take decisive action. When asked about the consequences for companies that still had not submitted RKAB documents after the 90-day deadline, Tri stated briefly on Monday: "Possible (revocation)." He did not disclose the exact number of companies whose qualifications were frozen, but confirmed that dozens of mining enterprises were involved in the violations.
Spot.
(1) Shanghai: On May 20, SMM #1 copper cathode spot prices against the current-month 2606 contract were quoted at a discount of 100 yuan/mt to a premium of 30 yuan/mt, with an average quote at a discount of 35 yuan/mt. In early trading, the SHFE copper 2606 contract showed a pattern of sideways consolidation followed by a rally, then a decline and rebound. The opening price was 103,670 yuan/mt, after which prices edged down to 103,460 yuan/mt, then rose somewhat, ranging between 103,500-103,800 yuan/mt. Copper prices then declined, touching a low of 103,010 yuan/mt, before stabilizing and rebounding, with a closing price of 103,300 yuan/mt. The inter-month Contango price spread between futures contracts ranged between 60-10 yuan/mt, and the SHFE copper import profit margin against the 2606 contract for the current month ranged from a loss of 160 yuan/mt to a loss of 90 yuan/mt. Outlook for today: Demand side, according to SMM, although copper prices retreated after a rapid rise, absolute prices remained at high levels, and end-user cargo pick-up pace slowed down. Affected by finished product inventories accumulation, some copper semis processing plants in east China chose to shut down for maintenance or close some production lines to reduce the capital occupation risk from high finished product inventories. Overall, amid weak demand, Shanghai spot copper premiums against the 06 contract are expected to remain at a discount today, or widen slightly.
(2) Guangdong: On May 20, 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 103,825 yuan/mt, down 890 yuan/mt from the previous trading day; the average price of SX-EW copper was 103,715 yuan/mt, down 895 yuan/mt from the previous trading day. Overall, downstream participants continued to hold bearish views on copper prices and were reluctant to purchase more, with trading activity remaining subdued.
(3) Imported copper: On May 20, the average warrant price fell $1/mt from the previous trading day to $72/mt (price range $68-76/mt); the average B/L price fell $1/mt from the previous trading day to $71/mt (price range $66-76/mt); the average EQ copper (CIF B/L) price fell $1/mt from the previous trading day to $41/mt (price range $38-44/mt), with quotes referencing cargoes arriving in mid-to-late May and early June.
(4) Secondary copper: On May 20 at 11:30, the futures closing price was 103,300 yuan/mt, down 640 yuan/mt from the previous trading day. The average spot premium was -35 yuan/mt, up 25 yuan/mt from the previous trading day. On May 20, copper scrap prices remained unchanged MoM. The copper scrap sales sentiment index fell to 2.66, and the procurement sentiment index fell to 2.25. The price difference between copper cathode and copper scrap was 2,036 yuan/mt, down 615 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,010 yuan/mt. According to an SMM survey, copper prices bottomed out again with limited rebound momentum. Secondary copper rod enterprises saw continued recovery in procurement sentiment, but copper scrap suppliers chose to hold prices firm on shipments. Given the sharp pullback in copper prices, secondary copper rod enterprises were still willing to purchase even as copper scrap prices remained firm, but most enterprises purchased as needed without showing any willingness to stockpile.
Prices: On the macro front, Trump stated that negotiations with Iran were entering the final stage, and the market expects the two sides to reach a ceasefire agreement. Combined with two oil tankers departing the Strait of Hormuz, geopolitical risks eased, market risk appetite rebounded, and a weaker US dollar supported copper prices to rise. On the fundamentals front, supply side, concentrated smelter maintenance tightened market availability, with high-quality copper in short supply; demand side, downstream participants maintained strong wait-and-see sentiment, primarily making just-in-time procurement. Overall, spot copper prices are expected to continue moving sideways at elevated levels 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.]