Futures Market: Overnight, LME copper opened at $9,325.5/mt, then shifted lower, fluctuating rangebound in early trading. It continued to decline during the session, bottoming at $9,258.5/mt, before slightly rebounding towards the close, ultimately settling at $9,289/mt, up 0.2%. Trading volume reached 20,000 lots, and open interest stood at 279,000 lots. Overnight, the most-traded SHFE copper 2503 contract opened at 76,250 yuan/mt, peaked at 76,340 yuan/mt in early trading, then shifted lower amid fluctuations, bottoming at 76,020 yuan/mt during the session. It slightly rebounded towards the close, finally settling at 76,130 yuan/mt, up 0.29%. Trading volume reached 22,000 lots, and open interest stood at 163,000 lots.
[SMM Copper Morning Brief] News: (1) According to market sources, Glencore's PASAR copper smelter in the Philippines has been shut down, with no confirmed timeline for resumption. The smelter has an annual crude smelting capacity of approximately 200,000 mt. Additionally, market rumors in December 2024 suggested that Glencore had expressed potential intentions to sell the smelter.
Spot Market: (1) Shanghai: On February 6, mainstream standard-quality copper spot prices against the front-month contract were quoted at a discount of 20 yuan/mt to a premium of 20 yuan/mt, while high-quality copper was quoted at parity to a premium of 40 yuan/mt. According to SMM, during the Chinese New Year holiday, domestic social inventories increased by over 100,000 mt, with approximately 75,000 mt accumulated in east China. In the short term, copper cathode supply remains sufficient, and downstream raw material and finished product inventories also accumulated during the holiday. Before end-user demand picks up, spot premiums are expected to remain under pressure.
(2) Guangdong: On February 6, #1 copper cathode spot prices against the front-month contract were quoted at a discount of 330 yuan/mt to parity, with an average discount of 165 yuan/mt, up 20 yuan/mt from the previous trading day. Hydro copper was quoted at a discount of 390 yuan/mt to 350 yuan/mt, with an average discount of 370 yuan/mt, up 10 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 76,010 yuan/mt, up 900 yuan/mt from the previous trading day, while hydro copper averaged 75,805 yuan/mt, up 890 yuan/mt. Overall, downstream demand is gradually increasing, and suppliers are no longer cutting prices to clear inventory, leading to higher spot premiums.
(3) Imported Copper: On February 6, warehouse warrant prices ranged from $61 to $75/mt, QP February, with the average price unchanged from the previous trading day. B/L prices ranged from $51 to $65/mt, QP March, with the average price up $1/mt from the previous trading day. EQ copper (CIF B/L) was quoted at $3/mt to $17/mt, QP March, with the average price unchanged from the previous trading day. Quotes referenced cargoes arriving in mid-to-late February. Buyers were actively inquiring, and spot market trading activity significantly improved. Quotes for mid-to-late February cargoes remained firm, but actual transaction prices showed considerable flexibility. Overall, differences between buyers and sellers persist, but trading activity has notably increased.
(4) Secondary Copper: On February 6, secondary copper raw material prices rose by 700 yuan/mt MoM. Guangdong bare bright copper prices ranged from 68,900 to 69,100 yuan/mt, up 700 yuan/mt MoM. The price difference between primary metal and scrap was 2,796 yuan/mt, up 186 yuan/mt MoM. The price difference between primary and secondary copper rods was 1,220 yuan/mt. According to the SMM survey, copper prices rose significantly today, limiting order volumes for secondary copper rod enterprises. Today's shipments were mainly based on pre-holiday orders.
(5) Inventory: On February 6, LME copper cathode inventories decreased by 3,050 mt to 249,275 mt. SHFE warehouse warrant inventories increased by 20,268 mt to 46,727 mt.
Prices: Macro side, US initial jobless claims for the week ending last Thursday were 219,000, compared to an expectation of 213,000. Meanwhile, there is no further news regarding future US tariffs, and the market is awaiting Friday's US non-farm payrolls data. The US dollar index rebounded slightly. Additionally, former President Trump stated that the Interior Secretary and Energy Secretary would work together to increase oil production and lower prices. The decline in crude oil also weighed on copper prices. Overnight, copper prices fell from the previous day's closing levels but remained elevated. Fundamentals side, most downstream copper rod enterprises are gradually resuming production, but in-plant inventories remain ample. Post-holiday social inventories also continue to build. As of Thursday, February 6, SMM data showed that copper inventories in major regions nationwide increased by 107,300 mt from pre-holiday levels to 273,100 mt, which is 12,600 mt lower than the 285,700 mt recorded after last year's holiday. Overall market trading activity remains subdued. In summary, the market is awaiting today's US non-farm payrolls data, and copper prices are expected to seek further direction.
[The above information is based on market data and comprehensive assessments by the SMM research team. The information provided is for reference only and does not constitute direct investment advice. Clients should make cautious decisions and not substitute this information for independent judgment. Any decisions made by clients are unrelated to SMM.]
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