The US tariff policy eased, boosting copper prices [SMM Copper Morning Meeting Summary]

Futures: Overnight, LME copper opened at $9,219.5/mt, fluctuated at the beginning, hit a low of $9,154.5/mt during the session, then oscillated, reaching a high of $9,258.5/mt, and finally closed at $9,228/mt, up 0.48%, with open interest at 290,706 lots. Overnight, the most-traded SHFE copper 2506 contract opened at 76,350 yuan/mt, hit a high of 76,490 yuan/mt and a low of 75,820 yuan/mt during the session, and finally closed at 76,070 yuan/mt, up 310 yuan from the previous trading day, a gain of 0.41%, with trading volume at 39,651 lots and open interest at 149,517 lots.

[SMM Copper Morning Meeting Summary] News: (1) According to the latest survey data released by the Federal Reserve Bank of New York, the one-year inflation expectation in the US in March hit an 18-month high, while medium and long-term inflation expectations remained stable. The one-year inflation expectation in March rose to 3.58%, the highest since September 2023, compared to the previous value of 3.13%. The three-year inflation expectation remained stable at 3%, while the five-year inflation expectation decreased from 3.0% to 2.9%.

(2) According to customs statistics, in Q1 this year, China's total import and export of goods reached 10.3 trillion yuan, up 1.3%. A spokesperson for the General Administration of Customs stated that currently, China's exports are indeed facing a complex and severe external environment, but "the sky will not fall." In recent years, China has actively built a diversified market and deepened industrial and supply chain cooperation with various parties, which not only empowers the development of the other side but also enhances our own resilience. At the same time, China's domestic demand market is vast and serves as an important rear base. We will unswervingly do our own things well and use our own certainty to cope with the uncertainty of the external environment.

Spot: (1) Shanghai: On April 14, SMM #1 copper cathode spot prices against the front-month 2504 contract were reported at a discount of 20 yuan/mt to a premium of 20 yuan/mt, with the average price at parity, up 5 yuan/mt WoW. The activity of intraday transactions decreased, downstream buyers were reluctant to purchase at lower prices, suppliers were less willing to sell at a discount for delivery goods, and some transactions were deadlocked.

(2) Guangdong: On April 14, Guangdong #1 copper cathode spot prices against the front-month contract were reported at a discount of 70 yuan/mt to a premium of 100 yuan/mt, with the average price at a premium of 15 yuan/mt, down 25 yuan/mt WoW. Overall, downstream buyers were unwilling to purchase more due to the sharp rise in copper prices, and suppliers had to continuously lower premiums to sell, resulting in quiet spot trading.

Imported copper: On April 14, warrant prices were $84-90/mt, QP April, with the average price down $2/mt WoW; B/L prices were $100-108/mt, QP May, with the average price down $1/mt WoW. EQ copper (CIF B/L) was $55-65/mt, QP May, with the average price flat WoW, with quotations referring to cargoes arriving in mid to late April. Most EQ B/Ls in mid to late April were used for long-term contract deliveries, making it difficult to find spot offers. Overall, the market was quiet, and buyers' purchase willingness was poor.

(4) Secondary copper: On April 14, secondary copper raw material prices rose by 2,100 yuan/mt WoW, Guangdong bare bright copper prices were 70,800-71,000 yuan/mt, up 2,100 yuan/mt from the previous trading day, the price difference between copper cathode and copper scrap was 594 yuan/mt, down 660 yuan/mt WoW. The price difference between copper cathode rod and secondary copper rod was 590 yuan/mt. According to the SMM survey, as secondary copper rod enterprises have continuously suspended production, traders' secondary copper rod inventories have been in a net outflow state, and both secondary copper rod enterprises and traders have little secondary copper rod inventory left. If copper prices continue to recover, the raw material procurement volume of secondary copper rod enterprises is expected to rebound, and traders' secondary copper rod inventories are expected to slightly increase.

(5) Inventories: On April 14, LME copper cathode inventories decreased by 950 mt to 207,825 mt; on April 14, SHFE warrant inventories increased by 2,805 mt to 89,369 mt.

Prices: On the macro front, Trump said he is considering some measures to help automakers adjust their supply chains from Mexico and Canada, and recently helped Apple CEO Tim Cook; the US Department of Commerce initiated a 232 investigation on semiconductors, pharmaceuticals, etc., and the White House exempted some smartphones and computers from hefty tariffs, improving market risk sentiment. At the same time, the EU Trade Commissioner is in Washington for talks: US National Economic Council Director Hassett: We have made great progress in tariff negotiations with the EU. The US has also made "initial contact" with China on tariffs through intermediaries. With improved concerns, copper prices were boosted. On the fundamental side, copper prices rebounded, and downstream buyers' willingness to fix prices decreased, mostly relying on previous orders. As of Monday, April 14, SMM's mainstream copper inventories across the country decreased by 16,700 mt WoW to 250,500 mt. Compared to the inventory changes from last Friday, only Jiangsu saw a slight increase in inventories, while other regions destocked. Total inventories were 148,500 mt lower than the 399,000 mt in the same period last year, with Shanghai 97,800 mt lower, Guangdong 15,900 mt lower, and Jiangsu 26,600 mt lower than the same period last year. Overall, with improved concerns about US tariffs, copper prices are expected to have some support today.

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[The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research decisions. Customers should make decisions cautiously and not use this to replace independent judgment. Any decisions made by customers are not related to SMM.]