Copper Prices Rebounded Overnight as Bears Reduced Positions; Pullback in Copper Prices Stimulated Purchasing, Spot Discounts Narrowed [SMM Copper Morning Meeting Minutes]

2026.6.5 Friday
Futures: LME copper opened overnight at $13,874.5/mt, dipping to $13,858/mt early in the session before the price center fluctuated upward, touching a high of $13,785/mt and then staying high to move sideways, ultimately closing at $13,904/mt, up 0.86%, with trading volume at 21,000 lots and open interest at 271,000 lots, down 1,063 lots from the previous trading day, mainly reflecting bears reducing positions. The most-traded SHFE copper 2607 contract opened overnight at 106,080 yuan/mt, touching a low of 105,950 yuan/mt right at the open before the center shifted upward to probe 106,800 yuan/mt, ultimately moving sideways to close at 106,320 yuan/mt, up 1.11%, with trading volume at 48,000 lots and open interest at 176,000 lots, down 1,169 lots from the previous trading day, reflecting bears reducing positions.
[SMM Copper Morning Meeting Summary] News:
(1) Central Asia Metals was set to acquire Cygnus Metals for approximately A$232 million ($166 million), expanding its portfolio into Canada and Australia. The London-listed base metal miner said it had signed a definitive agreement to acquire all Cygnus shares, with each Cygnus share exchangeable for 0.06 newly issued CAML shares. Through the acquisition of Cygnus, CAML would add a development-stage copper-gold mine asset in Quebec, Canada, to its existing portfolio of producing assets. The company currently owns and operates the Sasa underground zinc-lead mine in North Macedonia and the Kounrad copper mine in central Kazakhstan. This year, the two mines are expected to produce a combined 12,000-13,000 mt of copper cathode, 18,000-20,000 mt of zinc concentrates, and 26,000-28,000 mt of lead concentrates.
Spot:
(1) Shanghai: On June 4, the SHFE copper 2606 contract showed an overall "V"-shaped trend in the morning session. The opening price was 105,620 yuan/mt, after which prices continued to decline, probing a low of 105,000 yuan/mt, before rebounding and probing up to 106,990 yuan/mt. Prices pulled back slightly toward the close, with the closing price at 106,920 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 100-50 yuan/mt, and the import profit margin for SHFE copper against the 2606 contract for the current month ranged from a loss of 670 yuan/mt to a loss of 530 yuan/mt. Intraday, the copper price center shifted lower, and end-use consumption picked up slightly. According to SMM, downstream buyers mostly placed orders and transacted in the 105,000-105,500 yuan/mt range, with transaction conditions improving compared to the previous day. Market structure side, the inter-month Contango price spread between futures contracts narrowed slightly to 100-50 yuan/mt. Driven by delivery logic, suppliers strengthened their willingness to hold prices firm, pushing spot discounts to narrow. Inventory side, SMM data showed that social inventory of copper cathode in the Shanghai area registered 169,800 mt, down 6,900 mt from June 1, showing a slight destocking trend, mainly due to moderate consumption coupled with reduced arrivals. Overall, under the combined effects of copper price pullbacks stimulating demand, narrowing price spreads between futures contracts supporting firm pricing, and destocking, Shanghai spot copper is expected to see spot discounts against the 2606 contract narrow further today.
(2) Guangdong: On June 4, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 30 yuan/mt, flat from the previous trading day; standard-quality copper was quoted at a discount of 30 yuan/mt, up 10 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 80 yuan/mt, up 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 105,400 yuan/mt, down 1,280 yuan/mt from the previous trading day; the average price of SX-EW copper was 105,320 yuan/mt, down 1,265 yuan/mt from the previous trading day. Overall, copper prices pulled back notably and downstream began restocking, with trading activity improving overall.
(3) Imported copper: On June 4, the average warrant price was flat from the previous trading day at $67/mt (price range 63-71 $/mt); the average B/L price was flat from the previous trading day at $68/mt (price range 64-72 $/mt); the average EQ copper (CIF B/L) price was flat from the previous trading day at $37/mt (price range 32-42 $/mt). Quotes referenced cargoes arriving in June and early July.
(4) Secondary copper: On June 4, the 11:30 futures closing price was 105,610 yuan/mt, down 1,310 yuan/mt from the previous trading day. The average spot premium was -45 yuan/mt, up 20 yuan/mt from the previous trading day. Copper scrap prices fell 400 yuan/mt on the day. The copper scrap sales sentiment index dropped to 2.69, while the purchasing sentiment index rose to 2.34. The price difference between copper cathode and copper scrap was 2,716 yuan/mt, down 787 yuan/mt on the day. The price difference between copper cathode rod and secondary copper rod was 1,250 yuan/mt. According to an SMM survey, secondary copper rod enterprises indicated that copper scrap supply in the market was relatively ample, but copper price fluctuations had a significant impact on short-term supply. As copper prices pulled back sharply intraday, very little copper scrap was circulating in the market, and trading was mediocre.
Prices: On the macro front, Israel withdrew troops from southern Lebanon, boosting market optimism over a Lebanon ceasefire. The US dollar index softened, which was bullish for copper prices. In addition, expectations of US tariffs on copper cathode resurfaced, and the LME entered destocking mode, intensifying supply concerns in non-US regions and supporting copper prices to fluctuate at highs. On the fundamentals front, supply side, arrivals of both imported and domestic cargoes were relatively low, keeping market supply tight. Demand side, copper prices pulled back somewhat, stimulating downstream purchasing sentiment and releasing some rigid demand. Inventory side, as of Thursday, June 4, SMM copper inventories in major regions nationwide decreased by 10,900 mt WoW to 234,300 mt. Overall, supported by both macro tariff expectations and fundamental destocking, 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.]