The US dollar index declined, while copper prices continued to show strength. [Institutional Commentary]

Published: Mar 26, 2025 08:55

Save

The US dollar index declined. Reports indicated that Glencore's copper smelter Altonorte in Chile suspended production due to furnace issues (operating capacity of approximately 300,000 mt). Copper prices continued their strong performance, with LME copper closing up 1.61% at $10,094/mt yesterday, while the most-traded SHFE copper contract closed at 82,780 yuan/mt. On the industrial front, LME inventory decreased by 1,825 mt to 219,950 mt yesterday, with the ratio of cancelled warrants dropping to 49.1%, and the Cash/3M discount at $39.6/mt. Domestically, spot discounts in the Shanghai region were at 15 yuan/mt against futures yesterday, with the spot-futures price spread narrowing, leading to increased procurement by some downstream players, though overall performance remained moderate. Inventory in the Guangdong region increased slightly, with spot premiums against futures flat at 190 yuan/mt, as downstream players made limited restocking, and trading activity was weak. On the import-export front, domestic spot copper imports incurred a loss of around 650 yuan/mt yesterday, while Yangshan copper premiums remained flat MoM. In the copper scrap market, the price difference between primary metal and scrap stood at 2,330 yuan/mt yesterday, with the substitution advantage of copper scrap remaining relatively unchanged.

Price-wise, market expectations for a US tariff hike remain strong, with the price spread between US copper and LME copper maintaining a high level. As the extent of the tariff hike remains uncertain, risks of copper price volatility persist. Meanwhile, copper concentrate TCs continue to decline, with no signs of stabilization yet. However, as exports of copper ore inventories from Indonesia and Panama increase and smelting maintenance rises both domestically and internationally, TCs are expected to gradually stabilize, potentially weakening transactions based on raw material shortages. Overall, copper prices still have room to rise further, but as prices climb, caution is warranted against negative feedback from consumption and the risk of bullish factors being realized after the US tariff hike takes effect. Today’s reference range for the most-traded SHFE copper contract is 81,800-83,500 yuan/mt, while the reference range for LME copper 3M is $9,950-10,200/mt.

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 to learn 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

13 hours ago

"Premier Li Qiang Leads State Council Meeting on Enhancing Effective Investment, Boosting Economic Growth"

Premier Li Qiang presided over an executive meeting of the State Council to study policy measures for promoting effective investment. The meeting noted that promoting effective investment plays an important role in stabilizing economic growth and strengthening momentum for development. It is necessary to innovate and improve policy measures, and intensify efforts to enhance the efficiency of utilizing funds such as central budget investments, ultra-long-term special treasury bonds, local government special bonds, and new-type policy-based financial instruments. In conjunction with formulating and implementing the 15th Five-Year Plan

13 hours ago

"Guided by Xi Jinping Thought, Implement 20th CPC Congress Spirit, Apply New Development Philosophy...

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the plenary sessions of the Party’s 20th Central Committee, fully and faithfully apply the new development philosophy, strengthen top-level design, build computing power interconnection nodes oriented toward national hub periods, major strategic regions, and key industries, establish a system of computing power interconnection nodes, improve the efficiency and service level of public computing power resources, and promote high-quality development of computing power.

13 hours ago

Indirect Iran-US Nuclear Talks in Muscat Show Progress, Omani FM Mediates Tense but Efficient Discussions

After intensive indirect consultations, the new round of nuclear talks between Iran and the US in Muscat, the capital of Oman, has achieved phased progress. It is reported that during this round of talks, the Iranian and US delegations did not meet directly. Instead, Omani Foreign Minister Badr acted as an intermediary, conveying a series of core proposals, strategic concerns, and policy positions to the other side. The atmosphere at the talks was tense yet efficient. According to preliminary on-site assessments, although both sides continue to negotiate over specific terms, they have reached a consensus on the key objective of "continuing dialogue."

13 hours ago