Africa Finance Corporation Funds Construction of Zambia Copper Mine Railway; Overnight LME Copper and SHFE Copper Both Closed Lower [SMM Copper Morning Meeting Minutes]

2026.4.28 Tuesday
Futures: Overnight, LME copper opened at $13,316.5/mt, touching a high of $13,329/mt early in the session before the price center gradually shifted lower to probe $13,193/mt. It then fluctuated upward to finally close at $13,226.5/mt, down 0.47%, with trading volume at 15,500 lots and open interest at 278,700 lots, up 1,326 lots from the previous trading day, indicating bears adding positions. Overnight, the most-traded SHFE copper 2606 contract opened at 102,540 yuan/mt, probing a high of 102,660 yuan/mt early in the session before fluctuating downward to touch a low of 102,050 yuan/mt. It then swung wildly to finally close at 102,280 yuan/mt, down 0.64%, with trading volume at 35,000 lots and open interest at 208,000 lots, down 4,047 lots from the previous trading day, indicating bulls reducing positions.
[SMM Copper Morning Meeting Summary] News:
(1) Africa Finance Corp. (AFC) and the African Development Bank each pledged $500 million to build a railway corridor connecting Zambia's copper belt to global markets via the port of Lobito in Angola. AFC Executive Director and Chief Investment Officer Sameh Shenouda revealed at a recent meeting in Nairobi, Kenya, that Italy would also provide $320 million in funding for the project. As the lead developer and initiator, this pan-African financial institution is spearheading the corridor's construction. The 830-kilometer railway is expected to require a total investment of up to $5 billion, with construction planned to begin within the year and completion targeted for 2030. Shenouda stated: "To achieve the project's commercial feasibility, we need an annual freight volume of approximately 2.5 million to 3 million mt. We have already secured commitments for 1 million mt, with clear expectations to further increase to 5 million mt."
Spot:
(1) Shanghai: On April 27, the SHFE copper 2605 contract opened with a gap-up and retreated after rapid rises multiple times during the morning session, showing overall weak upward movement. The opening price was 102,700 yuan/mt. After opening, prices jumped to 103,000 yuan/mt before pulling back to probe a low of 102,620 yuan/mt. Prices then rose again, ranging between 102,700 yuan/mt and 103,000 yuan/mt, before climbing further to touch a high of 103,170 yuan/mt. By the close, prices pulled back somewhat, with a closing price of 103,070 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 160 yuan/mt to 110 yuan/mt. The import profit margin for SHFE copper against the 2605 contract for cargoes with invoices dated this month was a loss of 320-230 yuan/mt. Invoice structure: The tight supply of cargoes with invoices dated this month in the Shanghai spot copper market showed no signs of easing, with suppliers generally raising quotes for such cargoes and low-priced sources being hard to find. Some downstream enterprises, to secure invoice issuance for the current month, preferred to purchase directly from smelters, diverting some spot demand from the trading market. Supplier behavior: As month-end settlement approached, some suppliers showed low enthusiasm for shipments and held back from selling, further tightening available spot sources. Demand side, the upcoming Labour Day holiday next week is driving pre-holiday stockpiling demand among downstream enterprises, with purchasing likely to increase to some extent. The preference for cargoes with invoices dated this month will exacerbate the structural tightness in the spot market. Overall, under the combined effects of invoice scarcity, suppliers holding back from selling, and pre-holiday stockpiling, Shanghai spot copper prices against the 2605 contract are expected to maintain a premium today, continuing the overall firm trend.
(2) Guangdong: On April 27, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 280 yuan/mt, flat from the previous trading day; standard-quality copper was quoted at a premium of 200 yuan/mt, flat from the previous trading day; SX-EW copper was quoted at a premium of 140 yuan/mt, flat from the previous trading day. The average price of Guangdong #1 copper cathode was 103,085 yuan/mt, up 290 yuan/mt from the previous trading day; the average price of SX-EW copper was 102,985 yuan/mt, up 290 yuan/mt from the previous trading day. Overall, inventories hit a new low again, but spot premiums retreated after a rapid rise, and trading activity was generally tepid.
(3) Imported copper: On April 27, the average warrant price was flat from the previous trading day at $67/mt (price range $62-72/mt); the average B/L price was flat from the previous trading day at $65/mt (price range $61-71/mt); the average EQ copper (CIF B/L) price was flat from the previous trading day at $35/mt (price range $30-40/mt). Quotes referenced cargoes arriving from late April to early-to-mid May.
(4) Secondary copper: On April 27 at 11:30, the futures closing price was 103,070 yuan/mt, up 670 yuan/mt from the previous trading day. The average spot premium was 25 yuan/mt, down 10 yuan/mt from the previous trading day. On April 27, copper scrap prices remained unchanged MoM. The copper scrap sales sentiment index fell to 2.64, and the procurement sentiment index fell to 2.26. The price difference between copper cathode and copper scrap was 1,861 yuan/mt, up 93 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,715 yuan/mt. According to an SMM survey, secondary copper rod enterprises currently face restrictions on bill financing, leading to a notable decline in copper scrap procurement volumes. Moreover, due to the adoption of "reverse invoicing" practices and extended payment cycles, many yards reported that they were unable to replenish inventories immediately after selling goods, as funds were tied up in payment collection cycles, resulting in growing financial constraints among an increasing number of copper scrap yards.
Prices: On the macro front, the US requested negotiations, and Iran was considering the request. According to US media reports, Iran proposed reopening the Strait of Hormuz while postponing nuclear talks. Trump was skeptical but did not directly reject the proposal. Meanwhile, US Secretary of State Rubio opposed Iran's control over the strait, while Russian President Putin met with Iran's foreign minister and described the meeting as productive. Additionally, Iran demanded that strait transit fees be settled in rials. Fundamentals side, supply side, tight bill financing and month-end reluctance to sell led to tight spot cargo circulation in the market. Demand side, ahead of the Labour Day holiday, downstream enterprises released pre-holiday restocking demand, and procurement activity picked up. Inventory side, as of April 27 (Monday), SMM copper inventories across major regions nationwide stood at 248,600 mt, down 10,300 mt WoW, with inventories continuing to destock. Overall, copper prices are expected to move sideways and hold up well today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and not replace their own independent judgment with this information. Any decisions made by clients are not related to SMM.]