Market Gradually Trades US Tariff Expectations Copper Prices Maintain Fluctuating Trend [SMM Copper Morning Meeting Summary]
【SMM Morning Meeting Summary: Market Gradually Trading US Tariff Expectations Copper Prices Maintain Fluctuating Trend】On March 24, #1 copper cathode spot prices against the current month 2504 contract were at a discount of 20 yuan/mt to a premium of 20 yuan/mt, with the average price on par with the contract, up 15 yuan/mt MoM. According to SMM, over the weekend, national social inventory continued to decline. With the current inventory levels, the market still harbors supply concerns for Q2, and downstream buying interest is gradually warming...
SMM Copper Morning Meeting Summary: News: (1) US President Trump stated that he will announce additional tariffs on cars, wood, and chips in the coming days. Trump also mentioned the possibility of tariff reductions for multiple countries. Several media outlets reported that the reciprocal tariffs announced by Trump on April 2 would be more targeted, imposing broad tariffs on some countries while excluding others. Additionally, specific industry tariffs would not be announced on the same day.
(2) The Ministry of Finance released the 2024 China Fiscal Policy Implementation Report. The report proposed that fiscal policy in 2025 should be more proactive, supporting a comprehensive expansion of domestic demand. Efforts will be made to boost consumption, increase support for people's livelihoods, and raise residents' income through various channels. A special action plan to boost consumption will be implemented, with increased support for trade-in policies.
Spot: (1) Shanghai: On March 24, #1 copper cathode spot prices against the front-month 2504 contract ranged from a discount of 20 yuan/mt to a premium of 20 yuan/mt, averaging parity, up 15 yuan/mt WoW. According to SMM, national social inventory continued to decline over the weekend, and the market remains concerned about Q2 supply. Downstream buying interest is gradually warming up. Spot premiums are expected to rise slightly today.
(2) Guangdong: On March 24, #1 copper cathode spot prices against the front-month contract ranged from a premium of 160 yuan/mt to 220 yuan/mt, averaging 190 yuan/mt, down 35 yuan/mt WoW. Overall, as inventory stopped declining, suppliers actively reduced prices, leading to a significant drop in spot premiums and lower trading volumes compared to last Friday.
(3) Imported Copper: On March 24, warrant prices were $70-80/mt, QP April, up $5/mt WoW; B/L prices were $95-105/mt, QP April, up $2/mt WoW. EQ copper (CIF B/L) prices were $40-50/mt, QP April, up $10/mt WoW, with quotes referencing shipments arriving in mid-to-late March and early April. Since last Friday, EQ offers have risen significantly, and the impact of long-term short positions continues. Suppliers are holding back cargoes, expecting higher premiums, while buyers are actively inquiring but transactions remain limited.
(4) Secondary Copper: On March 24, secondary copper raw material prices remained unchanged WoW. Guangdong bare bright copper prices were 74,000-74,200 yuan/mt, unchanged from the previous trading day. The price difference between primary metal and scrap was 2,330 yuan/mt, up 95 yuan/mt WoW. The price difference between refined and scrap rods was 1,730 yuan/mt. According to SMM survey, secondary copper raw material suppliers are controlling shipment volumes due to bullish sentiment on copper prices. Respondents indicated that they would increase shipments if copper prices rise to 83,000 yuan/mt.
(5) Inventory: On March 24, LME copper inventories decreased by 2,825 mt to 221,775 mt; SHFE warrant inventories decreased by 4,049 mt to 146,011 mt.
Prices: Macro-wise, the preliminary US S&P Global Manufacturing PMI for March hit a new low, raising concerns about US economic growth. Trump's tariff measures have also increased uncertainty, leading to a rise in risk aversion and pushing up copper prices. Additionally, Trump called for an interest rate cut by the US Fed during a cabinet meeting, which is bullish for copper prices. Fundamentally, from the supply side, national social inventory continued to decline over the weekend. As of Monday, March 24, SMM's mainstream region copper inventories decreased by 12,800 mt to 333,600 mt compared to the previous Thursday, and by 15,400 mt compared to the previous Monday. The current inventory level has raised concerns about Q2 supply. From the demand side, downstream buyers are maintaining just-in-time procurement, but buying interest is gradually warming up, showing some positive changes. In terms of prices, the macro and fundamental factors are resonating, and copper prices are expected to have further room for increase today.
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