US Inflation Risks Persist, Copper Prices Fluctuate Upward [SMM Copper Morning Meeting Summary]

Published: Jan 15, 2025 09:27

Save

[SMM Morning Meeting Summary: US Inflation Risks Persist, Copper Prices Fluctuate Upward] On January 14, #1 copper cathode spot prices against the SHFE copper 2501 contract were quoted at a premium of 90-160 yuan/mt, with an average premium of 125 yuan/mt, down 40 yuan/mt MoM. Yesterday, the SHFE copper 2501 contract fluctuated against the 2502 contract in the range of contango 20 yuan/mt to backwardation 20 yuan/mt...

Futures Market: Overnight, LME copper opened at $9,160.5/mt, initially declined to a low of $9,107.5/mt, then fluctuated upward to a high of $9,170/mt before closing at $9,164/mt, with open interest at 280,000 lots. Overnight, the most-traded SHFE copper 2503 contract opened at 75,500 yuan/mt, fluctuated widely to a low of 75,360 yuan/mt, then rose to a high of 75,750 yuan/mt before slightly retreating to close at 75,670 yuan/mt, up 0.33%, with trading volume at 17,000 lots and open interest at 150,000 lots.

【SMM Copper Morning Brief】News: (1) Due to a decline in food costs and stable service prices, the US December PPI unexpectedly fell short of expectations, potentially easing concerns about persistent price pressures. However, it is worth noting that the YoY growth rates of December PPI and core PPI both marked the largest increases since early 2023. (2) In China, December's new social financing and new RMB loans both rebounded, with the decline in M1 narrowing, the growth in M2 expanding, and the M2-M1 gap narrowing.

Spot Market: (1) Shanghai: On January 14, #1 copper cathode spot premiums against the front-month 2501 contract were quoted at 90-160 yuan/mt, with an average of 125 yuan/mt, down 40 yuan/mt MoM. Yesterday, the SHFE copper 2501 contract traded against the 2502 contract in a contango of 20 yuan/mt to a backwardation of 20 yuan/mt. However, SHFE registered warehouse warrants currently stand at only around 11,000 mt. Tight deliverable supply provided some support for spot premiums, but overall market consumption remained weak. Spot premiums are expected to decline slightly today. (2) Guangdong: On January 14, #1 copper cathode spot premiums against the front-month contract were quoted at 200-250 yuan/mt, with an average of 225 yuan/mt, down 100 yuan/mt MoM. Overall, downstream consumption weakened, and suppliers continued to lower prices to sell, but actual transactions were not ideal. (3) Imported Copper: On January 14, warehouse warrant prices were $71-81/mt, QP January, with an average up $1/mt MoM; B/L prices were $59-73/mt, QP February, with an average up $1/mt MoM; EQ copper (CIF B/L) was quoted at $9-23/mt, QP February, with an average up $3/mt MoM, referencing cargoes arriving in late January and early February. The SHFE/LME price ratio slightly improved yesterday. February long-term contract declarations gradually started, and early market offers slightly rose compared to the previous day, with EQ copper quotes remaining firm. (4) Secondary Copper: On January 14, secondary copper raw material prices remained unchanged MoM, with Guangdong bare bright copper prices at 68,600-68,800 yuan/mt, unchanged MoM. The price difference between primary metal and scrap was 2,430 yuan/mt, down 100 yuan/mt MoM. The price difference between primary and secondary copper rods was 1,580 yuan/mt. According to the SMM survey, secondary copper rod enterprises currently adopt three procurement pricing methods: tax-exclusive, "reverse invoicing," and tax-inclusive. With the rise in copper price centers, secondary copper rod enterprises reported difficulties in pressing purchase prices and avoided stocking excessive raw material inventories before the Chinese New Year, aiming to convert all materials into finished products. (5) Inventory: On January 14, LME copper cathode inventories decreased by 1,550 mt to 261,900 mt; SHFE warehouse warrant inventories decreased by 1,355 mt to 9,730 mt.

Prices: Macro side, the US December PPI data fell short of expectations, the US dollar index slightly declined, and crude oil continued to rise, all supporting copper prices. On the fundamentals side, SHFE registered warehouse warrants currently stand at only around 11,000 mt, with tight deliverable supply providing some support for spot premiums. However, from the consumption perspective, as the year-end approaches, overall market consumption remains weak. In summary, with the US dollar index declining and crude oil continuing to rise, copper prices are expected to remain supported at the bottom today.

》Click to View the SMM Metal Database

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

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

2 hours ago

Resolution Copper Awards $110M in Contracts for Arizona Mine Development

According to foreign media reports, Resolution Copper has awarded approximately $110 million in drilling and underground development contracts as work advances at its proposed copper mine in Arizona, one of the world’s largest undeveloped copper deposits. Major Drilling America will undertake deep-hole directional diamond core drilling over the next two-and-a-half years, including drilling from the surface and from approximately 6,800 feet underground. Four large surface drilling rigs are planned for the programme, with two already on site and another two expected by the end of 2026. Redpath USA Corporation will undertake the first phase of underground development, including converting two existing shafts, each approximately 7,000 feet deep, for development activities. The contractor will also install underground infrastructure, construct a mine station at around 6,800 feet below surface and develop approximately 1,500 feet of new tunnels and supporting facilities. The contracts form part of an early phase of Resolution Copper’s planned $500 million investment programme, following completion of key environmental review and land-exchange processes earlier this year. The project is jointly owned by Rio Tinto with a 55% stake and BHP with 45%. If developed, Resolution Copper is expected to have the capacity to meet up to a quarter of annual US copper demand. However, a final investment decision remains subject to further data collection, permitting and partner approvals. From a copper-market perspective, the latest contract awards mark another step in advancing a potentially significant source of long-term US mine supply. While commercial production remains dependent on an eventual investment decision and further development, progress at Resolution is increasingly relevant as the US seeks to strengthen domestic copper supply amid rising requirements from power infrastructure, manufacturing and electrification.

2 hours ago

4 hours ago

Barrick's Lumwana Expansion in Zambia on Track for Q1 2028 Copper Production

The Lumwana Super Pit Expansion in Zambia remains on schedule, with first copper production targeted for the end of Q1 2028, keeping one of the country’s largest copper growth projects on its planned development timeline. According to the latest quarterly update from Barrick Mining Corporation, construction advanced during Q2 2026, with the second lift of the mill walls and roller slab completed and civil works for the primary crusher progressing. Civil construction also commenced on the transfer towers for the overland conveyor system. Most major long-lead equipment is now on site, including the mill shells and trunnions, primary crusher and tailings thickener. The expansion is expected to substantially increase Lumwana’s processing capacity and lift average annual copper production to around 240,000 tonnes once completed. The additional output would strengthen Lumwana’s role in Zambia’s medium-term copper supply growth and provide a significant contribution toward the country’s broader production expansion ambitions. From a copper supply perspective, maintaining the Q1 2028 first-production target improves visibility over Zambia’s medium-term mine supply pipeline. The project is particularly significant as Zambia seeks to translate a growing pipeline of mine expansions and new developments into sustained increases in national copper output. Continued progress at Lumwana will therefore be an important indicator of Zambia’s ability to deliver the next wave of additional mined copper supply from 2028 onward.

4 hours ago

7 hours ago

India Explores Chilean Copper Supply to Boost Domestic Industry Amid Rising Demand

According to foreign media reports, India's state-owned Hindustan Copper is exploring plans to supply copper concentrate sourced from Chilean state miner Codelco to domestic producers Hindalco Industries and Adani, as India seeks to secure raw materials for its expanding copper industry. Hindustan Copper, Coal India and NTPC Mining are reportedly assessing opportunities involving four copper mining blocks held by Codelco in Chile. Hindustan Copper signed a preliminary cooperation agreement with Codelco in 2025, followed by a non-disclosure agreement in May 2026, with due diligence now underway. The move comes against a widening gap between India's copper consumption and domestic supply. India currently produces around 573,000 mt of refined copper annually, while domestic demand is estimated at approximately 1.8 million mt. Government estimates suggest that the country could eventually depend on imports for 91%-97% of its copper concentrate requirements by 2047. India has been expanding domestic copper smelting and refining capacity as electricity infrastructure, renewable energy, manufacturing and transport increase demand for the metal. However, expanding processing capacity without a corresponding increase in domestic mine supply increases the country's exposure to the international concentrate market. Securing access to Chilean resources could therefore provide Indian smelters with greater long-term supply security while reducing reliance on spot concentrate purchases. Market Impact: India's push into overseas copper resources could introduce additional competition for internationally traded concentrate at a time when mine supply growth is struggling to keep pace with expanding global smelting capacity. As India builds out its copper processing industry, its growing requirement for imported feedstock could increasingly influence Asian concentrate trade flows and competition for long-term supply contracts.

7 hours ago