Long and Short Factors Intertwined, Copper Prices Fluctuate at High Levels, Spot Market Continues to Signal Tightness [SMM Copper Morning Meeting Summary]

Futures Market: LME copper opened at $9,842.5/mt overnight, with intraday prices fluctuating, reaching a high of $9,917.0/mt and a low of $9,837.0/mt, showing an overall fluctuating upward trend. It finally closed at $9,902.0/mt, up $37.5/mt or 0.38% from the previous closing price of $9,864.5/mt. Trading volume reached 15,927 lots, and open interest stood at 290,561 lots. Overnight, the SHFE copper 2505 contract opened at 80,560 yuan/mt, with intraday prices fluctuating, hitting a high of 80,640 yuan/mt and a low of 80,220 yuan/mt, showing an overall fluctuating trend. It finally closed at 80,550 yuan/mt, up 200 yuan or 0.25% from the previous value. Trading volume was 32,138 lots, and open interest reached 231,245 lots.
[SMM Copper Morning Brief] News: (1) According to SMM, the Indonesian government announced on Monday that it had issued a six-month copper concentrate export license to Freeport Indonesia. On March 18, Freeport Indonesia stated that it had obtained an export license for 1.27 million mt of copper concentrate from the Indonesian Ministry of Trade, indicating that Freeport's copper concentrate shipments at ports are allowed to commence.
Spot Market: (1) Shanghai: On March 18, mainstream standard-quality copper spot prices against the front-month contract were quoted at parity to a premium of 30 yuan/mt, while high-quality copper was quoted at a premium of 30-50 yuan/mt. After the delivery of the SHFE copper 2503 contract, the price spread between the 2504 and 2505 contracts continued to narrow during the day, with the near-far-end structure showing a persistent inverted "V" shape. Suppliers held back cargoes more strongly, and with nearly 5,000 mt of warrants registered yesterday, the availability of circulating supply tightened further. Spot prices are expected to hover at a slight premium tomorrow.
(2) Guangdong: On March 18, #1 copper cathode spot prices against the front-month contract were quoted at a premium of 50-100 yuan/mt, with an average premium of 75 yuan/mt, down 25 yuan/mt from the previous trading day. SX-EW copper was quoted at a premium of 40-50 yuan/mt, with an average premium of 45 yuan/mt, down 30 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 80,470 yuan/mt, up 475 yuan/mt from the previous trading day, while the average price of SX-EW copper was 80,385 yuan/mt, up 470 yuan/mt from the previous trading day. Overall, both copper prices and premiums rose, but actual transactions were moderate. Attention should be paid to whether inventories will continue to decline in the future.
(3) Imported Copper: On March 18, warrant prices ranged from $48 to $60/mt, QP April, with the average price up $4/mt from the previous trading day. B/L prices ranged from $76 to $90/mt, QP April, with the average price unchanged from the previous trading day. EQ copper (CIF B/L) was quoted at $20-30/mt, QP March, with the average price up $5/mt from the previous trading day. Quotes referenced cargoes arriving in mid-to-late March and early April. Due to the continued delay in long-term contract schedules, market inquiries focused on April arrivals and EQ B/Ls. Meanwhile, warrant offers rose due to an improved SHFE/LME price ratio, but intraday transactions remained weak.
(4) Secondary Copper: On March 18, secondary copper raw material prices rose by 300 yuan/mt MoM. Guangdong bare bright copper prices ranged from 73,200 to 73,400 yuan/mt, up 300 yuan/mt from the previous trading day. The price difference between primary metal and scrap was 2,386 yuan/mt, up 211 yuan/mt MoM. The price difference between primary and secondary copper rods was 1,735 yuan/mt. According to the SMM survey, copper prices remained above 80,000 yuan/mt, which somewhat suppressed purchasing sentiment among end-user wire and cable enterprises. Meanwhile, copper prices hovering at highs kept the arbitrage space for traders unchanged, resulting in flat transactions for secondary copper rods today.
[Reproduction Must Retain Source - SMM] Copper Prices Hover at Highs, Secondary Copper Rod Transactions Remain Flat
(5) Inventory: On March 18, LME copper cathode inventories decreased by 3,275 mt to 227,700 mt. On the same day, SHFE warrant inventories decreased by 503 mt to 162,599 mt.
Prices: On the macro side, regarding US tariffs, the US Treasury Secretary stated that reciprocal tariff rates on April 2 would vary by country, with some countries potentially facing lower rates. The US dollar index hovered at lows. In the Middle East, the Israeli military launched another large-scale airstrike on Gaza. Regarding the Russia-Ukraine conflict, both Putin and Zelensky agreed not to attack energy facilities for 30 days. Additionally, according to SMM, the Panamanian president has approved the export of 120,000 mt of Cobre Panama copper concentrates, but these have not entered the Chinese market. Meanwhile, the Indonesian government announced on Monday that it had issued a six-month copper concentrate export license to Freeport Indonesia, which stated that it had obtained an export license for 1.27 million mt of copper concentrate from the Indonesian Ministry of Trade, allowing Freeport's copper concentrate shipments at ports to commence. Amid mixed factors, copper prices hovered at highs. On the fundamentals side, copper prices stood above the 80,000 yuan threshold, putting pressure on downstream consumption. After the delivery of the 2503 contract, suppliers held back cargoes more strongly, warrant registrations increased, and the availability of circulating supply tightened. Spot prices are expected to remain at a slight premium. Additionally, according to SMM, a significant number of long-term contracts for imported copper cathodes scheduled to arrive in China in April have been delayed or canceled, which may lead to a continued decline in net imports of copper cathodes in the future. Overall, with the US dollar index remaining at low levels and continuing to decline, copper prices are expected to remain firm today.
[The Information Provided Is for Reference Only. This Article Does Not Constitute Direct Investment Research Advice. Clients Should Make Decisions Prudently and Not Substitute This for Independent Judgment. Any Decisions Made by Clients Are Unrelated to SMM.]