US Data Falls Short of Expectations; Both the US Dollar and Copper Prices Weaken [SMM Copper Morning Meeting Summary]

Futures Market: Last Friday night, LME copper opened at $9,614.5/mt, initially rose slightly to a high of $9,684.5/mt, then declined all the way, hitting a low of $9,448.5/mt before stabilizing and finally closing at $9,465/mt, down 0.12%. Trading volume reached 36,000 lots, and open interest stood at 295,000 lots. Last Friday night, the most-traded SHFE copper 2503 contract opened at 78,440 yuan/mt, briefly touched a high of 78,580 yuan/mt, then fluctuated downward, hitting a low of 76,980 yuan/mt before stabilizing and finally closing at 77,120 yuan/mt, down 0.89%. Trading volume reached 54,000 lots, and open interest stood at 178,000 lots.

【SMM Copper Morning Meeting Notes】News: (1) US January retail sales MoM recorded -0.9%, the largest decline since January 2024.

(2) Market concerns over escalating trade conflicts eased as Trump postponed the implementation of reciprocal tariffs.

Spot Market: (1) Shanghai: On February 14, #1 copper cathode spot premiums against the front-month 2502 contract were quoted at 10-40 yuan/mt, with an average of 25 yuan/mt, up 25 yuan/mt from the previous trading day. On February 14, as copper prices surged, the price spread between near-month contracts widened again, prompting suppliers to raise premiums. Downstream stocking sentiment remained weak in the short term, but unreported inventory had declined. February 17 marked the last trading day for the SHFE copper 2502 contract, and spot premiums were expected to rise due to fluctuations in the price spread.

(2) Guangdong: On February 14, Guangdong #1 copper cathode spot prices against the front-month contract were quoted at a discount of 10 yuan/mt to a premium of 50 yuan/mt, with an average premium of 20 yuan/mt, up 15 yuan/mt from the previous trading day. Overall, with both inventory and copper prices rising, downstream consumption weakened, and spot premiums only increased slightly. Overall trading activity was weaker than on February 13.

(3) Imported Copper: On February 14, warehouse warrant prices were $54-68/mt, QP March, with an average down $2/mt from the previous trading day. B/L prices were $52-70/mt, QP March, with an average down $2/mt from the previous trading day. EQ copper (CIF B/L) was quoted at $2-16/mt, QP March, with an average down $2/mt from the previous trading day. Quotes referenced late February and early March arrivals. On February 14, the SHFE/LME price ratio against the SHFE copper 2503 contract was around -750 yuan/mt. LME copper 3M-Mar was at C$49.46/mt, and the 2502 month-date to 2503 month-date spread was around C$0/mt. Overnight, the LME near-month structure narrowed significantly, and the SHFE/LME price ratio deteriorated sharply. Suppliers mostly adopted a wait-and-see attitude in the morning market, with very sluggish transactions and few spot quotes available.

(4) Secondary Copper: On February 14, secondary copper raw material prices rose by 200 yuan/mt MoM. Guangdong bare bright copper prices were 70,500-70,700 yuan/mt, up 200 yuan/mt from the previous trading day. The price difference between primary metal and scrap was 2,829 yuan/mt, up 583 yuan/mt MoM. The price difference between primary and secondary copper rods was 1,355 yuan/mt. According to the SMM survey, due to delayed worker returns at secondary copper raw material yards, dismantling plants generally saw late worker arrivals this year. Yards reported that workers would gradually return this week, leading to a rebound in procurement volumes.

(5) Inventory: On February 14, LME copper cathode inventory increased by 17,300 mt to 255,225 mt. On February 14, SHFE warrant inventory increased by 19,689 mt to 111,621 mt.

Prices: Macro side, US January retail sales MoM recorded -0.9%, the largest decline since January 2024. The disappointing data heightened concerns over a sharp economic slowdown, weighing on the US dollar index and copper prices. Fundamentals side, unreported inventory at copper rod enterprises showed some decline, but copper price centers remained high. If copper prices do not drop significantly in the short term, downstream stocking sentiment is expected to remain weak, focusing on low-priced sources. Overall, while domestic downstream procurement sentiment remains weak, production is recovering. With the Two Sessions approaching, copper prices are expected to find support at the bottom.

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