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On the macroeconomic front, this week coincided with the Christmas holiday, leaving only two overseas trading days, and macro news remained quiet. The US dollar index fluctuated at high levels above 108 during the week, exerting continuous pressure on copper prices. The potential risk of a renewed trade war under Trump’s administration, particularly the possibility of imposing more tariffs on China, became a market focus. Tariff barriers may further weaken copper demand in 2025. In Japan, the Bank of Japan stated that although inflation has rebounded, considering the economic recovery is not yet fully stable, the current monetary policy remains unchanged. According to Goldman Sachs' "2025 China Macroeconomic Outlook," under the baseline scenario, the US tariff increase policy on China is expected to significantly drag down China's economic growth in 2025, with export growth likely to slow sharply. Supporting domestic demand and investment-driven internal circulation will become a key focus of China's macroeconomic policy in 2025. LME copper fluctuated rangebound this week near $8,950-9,050/mt; SHFE copper fluctuated between 73,500-74,500 yuan/mt, with the overall price center slightly moving upward.
On the fundamentals, copper concentrate TCs continued to decline this week. Concerns over tight copper scrap supply in 2025 prompted domestic smelters to actively seek raw materials, accelerating negotiations with mines. For copper cathode, long-term contracts in foreign trade were gradually finalized this week. Affected by tight raw material supply sentiment, market expectations for a balanced copper cathode supply in 2025 shifted. Premiums for US dollar-denominated copper surged, with January arrivals actively traded, and spot cargoes were unusually popular during the holiday. In the domestic market, under the pressure of year-end payment settlements, companies across the supply chain were reluctant to hold excessive inventory, triggering a wave of low-price sales, and market premiums shifted from positive to negative. Looking ahead to next week, with limited macro news during the transition between the old and new years, fundamentals are expected to provide upward momentum for copper prices. LME copper is expected to fluctuate between $9,050-9,200/mt, while SHFE copper is expected to range from 74,000-75,000 yuan/mt. In the spot market, market demand is expected to remain subdued before year-end settlements, but demand is likely to improve after the new year as suppliers rebuild inventories and long-term contracts resume execution. Spot prices against the SHFE copper 2501 contract are expected to range from a discount of 80 yuan/mt to a premium of 50 yuan/mt.
The model predicts that the average price of SMM #1 copper cathode from this Friday to next Thursday (2025-01-02) will range between [72,500, 74,930], with a price center of 73,850 yuan/mt. The extreme price range is [71,210, 76,220], the normal price range is [72,070, 75,360], and the conservative price range is [72,930, 74,500]. Next week's price trend is expected to fluctuate upward. The support range is [72,070, 72,930], and the resistance range is [74,500, 75,360].
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