Copper Cathode Rod Producers' Operating Rate Expected to Decline in May Amid Weak Orders

Copper Cross-Market Spread: Since entering May, the LME/COMEX copper spread has continued to widen. According to SMM data, the highest spread between the LME and COMEX nearby copper contracts expanded from US$108.61/mt on April 30 to US$378.5/mt on May 13, marking a notable widening within the month. Based on current spot trade feedback, no significant change has yet been observed in refined copper trade flows. At present, China’s imported copper arrivals and transactions are still mainly influenced by factors such as the import arbitrage ratio, domestic spot demand, and the execution of overseas long-term contracts.

SMM Morning Meeting Summary: Overnight, LME copper opened at $13,958.5/mt, fluctuated downward in early trading to touch a low of $13,901/mt, then the price center gradually shifted upward to reach $14,106.5/mt before experiencing wild swings, ultimately closing at $14,080/mt, up 1.15%, with trading volume at 25,800 lots and open interest at 273,000 lots, an increase of 1,127 lots from the previous trading day, indicating bulls adding positions. Overnight, the most-traded SHFE copper 2606 contract opened at 107,000 yuan/mt, fluctuated downward in early trading to touch a low of 106,840 yuan/mt, then the price center fluctuated upward to reach a high of 109,470 yuan/mt, after which the price center gradually shifted downward, ultimately closing at 107,720 yuan/mt, up 0.93%, with trading volume at 84,300 lots and open interest at 205,000 lots, a decrease of 1,769 lots from the previous trading day, indicating bears reducing positions.

Rio Tinto stated that it expects its copper production to increase by approximately 13% by 2030, mainly driven by growth from the Oyu Tolgoi project in Mongolia and the Kennecott operation in the United States. The company also noted that global copper mine development continues to face challenges including lengthy permitting processes and slow supply additions. As demand from AI, electrification, and energy transition sectors continues to grow, major mining companies are accelerating global copper resource development and long-term supply expansion strategies.