Strong Earthquake in Chile Disrupted Copper Ore Production; LME Copper Closed Overnight While SHFE Copper Ended Higher [SMM Copper Morning Meeting Minutes]

2026.5.26 Tuesday
Futures: LME copper was closed overnight. The most-traded SHFE copper 2607 contract opened higher with a gap at 106,300 yuan/mt overnight, after which the copper price center shifted down rapidly, then dipped to 105,420 yuan/mt amid wild swings, and fluctuated upward near the end of the session to finally close at 105,780 yuan/mt, up 0.39%. Trading volume reached 26,500 lots, and open interest stood at 181,000 lots, down 1,026 lots from the previous trading day, indicating bears reducing positions.
[SMM Copper Morning Meeting Summary] News:
(1) On May 26 (Tuesday), Codelco said that the earthquake in Chile's Antofagasta region had affected mine operations. Due to low visibility at open-pit mines and localized power outages, some production operations had been suspended, and certain operational processes at the mine site were under inspection. According to Xinhua's Santiago report on May 25, a 6.9-magnitude earthquake struck the Antofagasta region in northern Chile on the 25th, according to the National Seismological Center of the University of Chile. No casualties or property damage had been reported so far. The earthquake occurred at 17:52 local time on the 25th (05:52 Beijing time on the 26th), with the epicenter located 20 kilometers northeast of Calama in the Antofagasta region, at a depth of 114 kilometers.
Spot:
(1) Shanghai: In the early session on May 25, the SHFE copper 2606 contract opened higher with a gap and then edged down, with an opening price of 104,950 yuan/mt. After opening, prices rose quickly to 105,820 yuan/mt, then fluctuated downward, dipping to 105,330 yuan/mt. Prices rebounded slightly toward the close, with a closing price of 105,480 yuan/mt. The inter-month Contango price spread between futures contracts ranged between 140 yuan/mt and 110 yuan/mt. LME copper was closed today. Looking ahead, copper prices are expected to edge up intraday, with market transactions turning notably quieter. Downstream enterprises are expected to mainly make just-in-time procurement, and demand is unlikely to see a notable increase. The inter-month Contango price spread between futures contracts is expected to widen slightly, and suppliers are expected to show willingness to hold prices firm. In addition, according to SMM, available spot cargo in Jiangsu was tight, and some downstream enterprises reported difficulty in finding low-priced supplies. Overall, with high copper prices suppressing demand and the inter-month Contango price spread between futures contracts widening slightly, Shanghai spot copper prices against the 2606 contract are expected to remain at a discount today, or widen slightly.
(2) Guangdong: On May 25, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 210 yuan/mt, down 30 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 140 yuan/mt, down 25 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 70 yuan/mt, down 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 104,570 yuan/mt, down 955 yuan/mt from the previous trading day, and the average price of SX-EW copper was 104,465 yuan/mt, down 950 yuan/mt from the previous trading day. Overall, downstream operating rates declined and procurement volume decreased, with spot trades remaining inactive.
(3) Imported copper: On May 25, the average warrant price remained flat from the previous trading day at $72/mt (price range $68-76/mt); the average B/L price remained flat from the previous trading day at $71/mt (price range $66-76/mt); the average EQ copper (CIF B/L) price remained flat from the previous trading day at $41/mt (price range $38-44/mt), with quotes referencing cargoes arriving at ports in mid-to-late May and early June.
(4) Secondary copper: On May 25 at 11:30, the futures closing price was 105,480 yuan/mt, up 1,000 yuan/mt from the previous trading day. The average spot premiums were -60 yuan/mt, down 15 yuan/mt from the previous trading day. On May 25, copper scrap prices rose 500 yuan/mt MoM, the copper scrap sales sentiment index rose to 2.77, the purchase sentiment index fell to 2.21, and the price difference between copper cathode and copper scrap was 2,962 yuan/mt, up 426 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,680 yuan/mt. According to an SMM survey, copper prices rebounded, but after last week's fluctuating trend in copper prices, traders had little copper scrap inventory remaining. Therefore, the copper scrap market supply tightened in the short term. Combined with signs of capacity recovery in secondary copper rod production in certain regions, this may further exacerbate the undersupply in the copper scrap market.
Prices: On the macro front, Iran denied imposing transit fees on the Strait of Hormuz and stated that there was no clear consensus on the Iran-US nuclear issue, making it difficult to reach an agreement in the short term. The US demanded that Iran's enriched uranium be transferred or destroyed. Overall negotiations between the two sides proceeded smoothly, with a preliminary understanding reached on frozen assets and a draft proposal for free passage through the strait and resumption of navigation within 30 days. In addition, Israel continued to intensify military strikes against Hezbollah in Lebanon, and rising expectations for Iran-US peace talks pushed copper prices higher. Fundamentals side, on the supply end of the copper market, imported copper arrivals remained low, while domestic arrivals increased slightly, marginally easing the tight supply situation; on the demand end, suppressed by elevated copper prices, downstream purchase willingness was weak, and overall consumption showed mediocre performance. Inventory side, as of Monday, May 25, copper inventories in major regions across China surveyed by SMM increased by 2,300 mt WoW to 245,200 mt, with total inventories up 105,500 mt compared to the same period last year at 139,700 mt. Overall, copper prices are expected to maintain a fluctuating trend and move sideways 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 replace their own independent judgment with this information. Any decisions made by clients are not related to SMM.]