Macro Front Remains Quiet as Market Adopts a Wait-and-See Attitude [SMM Copper Morning Meeting Summary]

Futures Market: Overnight, LME copper opened at $9,023/mt, initially fluctuating downward before rebounding to a session high of $9,035/mt. It then fluctuated downward again, hitting a session low of $8,977/mt near the close, and finally settled at $8,980/mt, up 0.16%. Trading volume reached 15,000 lots, and open interest stood at 260,000 lots. Overnight, the most-traded SHFE copper 2502 contract opened at 74,500 yuan/mt, briefly hitting a session high of 74,580 yuan/mt at the start. It fluctuated during the session, touching a low of 74,370 yuan/mt, and slightly rebounded before pulling back again to close at 74,430 yuan/mt, up 0.01%. Trading volume reached 15,000 lots, and open interest stood at 144,000 lots.
【SMM Copper Morning Brief】News: (1) CMOC announced that in 2024, the company’s main products, copper and refined cobalt, will see significant production increases, with annual outputs of approximately 650,200 mt and 114,200 mt, respectively, up by 230,600 mt and 58,600 mt YoY, representing growth rates of 55% and 106%, respectively.
Spot Market: (1) Shanghai: On January 7, mainstream spot premiums for standard-quality copper against the front-month contract were quoted at 90–120 yuan/mt, while high-quality copper was quoted at 110–140 yuan/mt. Suppliers showed improved sentiment compared to the previous day, but the arrival of imported copper increased selling pressure. Morning premiums slightly declined compared to the previous day. However, deliverable cargoes remain scarce, and spot premiums are expected to remain stable tomorrow.
(2) Guangdong: On January 7, spot #1 copper cathode premiums against the front-month contract were quoted at 300–360 yuan/mt, with an average premium of 330 yuan/mt, up 140 yuan/mt from the previous trading day. Hydro copper premiums were quoted at 240–260 yuan/mt, with an average premium of 250 yuan/mt, up 150 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 74,665 yuan/mt, up 650 yuan/mt from the previous trading day, while hydro copper averaged 74,585 yuan/mt, up 660 yuan/mt. Overall, inventories have fallen to historical lows, driving spot premiums significantly higher, but supply remains tight.
(3) Imported Copper: On January 7, warehouse warrant prices ranged from $63 to $77/mt (QP January), with the average price unchanged from the previous trading day. B/L prices ranged from $56 to $70/mt (QP February), with the average price down $1/mt from the previous trading day. EQ copper (CIF B/L) was quoted at $9 to $23/mt (QP February), with the average price down $3/mt from the previous trading day. These quotes reference cargoes arriving in mid-to-late January and early February. Due to rising copper prices and a weaker SHFE/LME price ratio, near-month B/L prices faced downward pressure. Previously locked-in ratio cargoes are gradually being imported, leading to muted market activity. On the warehouse warrant side, suppliers remained reluctant to sell, and offers were scarce in the morning.
(4) Secondary Copper: On January 7, secondary copper raw material prices rose by 200 yuan/mt MoM. Guangdong bare bright copper prices ranged from 68,100 to 68,300 yuan/mt, up 200 yuan/mt from the previous trading day. The price difference between primary metal and scrap was 1,772 yuan/mt, up 227 yuan/mt MoM. The price difference between primary and secondary copper rods was 1,195 yuan/mt. According to the SMM survey, the price differences for both primary metal and scrap, as well as primary and secondary copper rods, have been widening in recent days. However, due to limited new orders from end-users after the New Year holiday, some companies have decided to start the Chinese New Year break earlier. As a result, the economic benefits of secondary copper rods are gradually becoming evident, but weak terminal demand has failed to support active procurement by consumer enterprises, leading to limited transactions for secondary copper rods today.
(5) Inventory: On January 7, LME copper cathode inventories decreased by 1,500 mt to 267,150 mt. SHFE warehouse warrant inventories decreased by 902 mt to 14,750 mt.
Prices: Macro side, the US November JOLTs job openings data recorded 8.098 million, exceeding market expectations, with the previous value revised upward. The December ISM Non-Manufacturing PMI came in at 54.1, also beating market expectations. While the labour market may be slowing, the pace of deceleration is unlikely to prompt the US Fed to rush into an interest rate cut. Additionally, the market is still digesting the impact of tariff hikes introduced during the Trump administration, which could drive US inflation higher, strengthen the US dollar, and suppress copper prices, collectively limiting copper price gains. Fundamentals side, the arrival of imported copper has increased, and some suppliers have been actively offloading at the beginning of the year, boosting copper cathode spot supply. Meanwhile, overall market transactions have slightly improved, and spot premiums are expected to remain stable. In terms of prices, the US January ADP employment data and the Fed meeting minutes are scheduled for release today, and copper prices are expected to stabilize.

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【The above information is based on market data collected and comprehensively evaluated by the SMM research team. The information provided herein is for reference only and does not constitute direct investment advice. Clients should make prudent decisions and not substitute this information for independent judgment. Any decisions made by clients are unrelated to SMM.】