U.S. Consumer Index Weakens for Several Consecutive Months, Copper Prices Drop Back Slightly Overnight [SMM Copper Morning Meeting Summary]

Futures Market: Overnight, LME copper opened at $9,509/mt, initially reaching a high of $9,530/mt before fluctuating downward to a low. After a slight rebound, it continued to pull back, hitting a low of $9,411.5/mt and finally closing at $9,423/mt, up 0.3%. Trading volume reached 22,000 lots, and open interest stood at 296,000 lots. Overnight, the most-traded SHFE copper 2504 contract opened at 77,310 yuan/mt, initially reaching a high of 77,350 yuan/mt before fluctuating downward to an intraday low of 76,900 yuan/mt. It rebounded slightly towards the end and finally closed at 77,100 yuan/mt, down 0.1%. Trading volume reached 29,000 lots, and open interest stood at 165,000 lots.
【SMM Copper Morning Briefing】News: (1) First Quantum Minerals and its workers and suppliers in Panama are actively working to gain support for the reopening of a $10 billion copper mine that has been closed for over a year. Maru Galvez, the public relations manager of the Cobre Panama mine, stated on Monday that the company has shifted from a low-profile approach to engaging with Panamanians to more prominent activities such as large-scale mine tours and public events. These efforts are yielding results, as a recent community survey showed that 96% of respondents believe the government should renegotiate the mine contract.
Spot Market: (1) Shanghai: On February 26, mainstream standard-quality copper spot prices against the front-month contract were quoted at a discount of 160-130 yuan/mt, while high-quality copper was quoted at a discount of 130-100 yuan/mt. Spot premiums slightly declined during the day, with both buyers and sellers remaining inactive. In the short term, high copper prices have become an obstacle to destocking by processing enterprises. If copper prices continue to rise due to overseas market influences, February spot premiums are expected to remain low.
(2) Guangdong: On February 26, Guangdong #1 copper cathode spot prices against the front-month contract were quoted at a discount of 70 yuan/mt to parity, with an average discount of 35 yuan/mt, up 5 yuan/mt from the previous trading day. Hydro copper was quoted at a discount of 200-160 yuan/mt, with an average discount of 180 yuan/mt, down 10 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 77,070 yuan/mt, up 125 yuan/mt from the previous trading day, while hydro copper averaged 76,925 yuan/mt, up 110 yuan/mt. Overall, a significant inventory decline boosted premiums, but downstream restocking demand was moderate near month-end, and overall trading activity was weaker than the previous day.
(3) Imported Copper: On February 26, warehouse warrant prices ranged from $34 to $44/mt, QP March, with an average price down $1/mt from the previous trading day. B/L prices ranged from $48 to $60/mt, QP March, with the average price unchanged from the previous trading day. EQ copper (CIF B/L) was quoted at $0-8/mt, QP March, with the average price unchanged from the previous trading day. Quotes referenced cargoes arriving in mid-to-late March. The LC price spread widened again to nearly $1,000/mt due to Trump's investigation into copper imports. Meanwhile, the market's expectation for SHFE/LME price ratio recovery weakened as LME copper surged, leading to muted spot market transactions, with suppliers mostly adopting a wait-and-see attitude.
(4) Secondary Copper: On February 26, secondary copper raw material prices remained unchanged MoM. Guangdong bare bright copper prices were 70,600-70,800 yuan/mt, unchanged from the previous trading day. The price difference between primary metal and scrap was 1,532 yuan/mt, down 195 yuan/mt MoM. The price difference between primary and secondary copper rods was 770 yuan/mt. According to the SMM survey, secondary copper rod enterprises reported that the tight supply of secondary copper raw materials has not improved this week. Due to rising copper prices before and after the Chinese New Year, many secondary copper raw material warehouses actively sold off inventories, resulting in low social inventory levels. Coupled with copper prices pulling back and maintaining a fluctuating trend, suppliers' willingness to sell was suppressed.
(5) Inventory: On February 26, LME copper cathode inventory decreased by 1,675 mt to 265,025 mt. On the same day, SHFE warrant inventory increased by 585 mt to 153,277 mt.
Prices: On the macro side, Trump stated on Wednesday that his administration would soon announce a 25% tariff on goods imported from the EU. He also raised hopes of delaying the imposition of high tariffs on imports from Mexico and Canada, stating that tariffs on these countries would take effect on April 2, about a month later than next week's deadline. Overall, expectations of US tariffs on copper boosted LME copper, but the impact on SHFE copper was limited. On the fundamentals side, high copper prices in the short term remain an obstacle to destocking by processing enterprises. Suppliers reported difficulties in selling, with both buyers and sellers showing low activity. In terms of prices, copper prices are expected to be supported by tariff expectations today.
【The information provided is for reference only. This article 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.】