US Tariff Policy Keeps the Market in Wait-and-See Mode, Copper Prices Expected to Remain Low [SMM Copper Morning Meeting Summary]

Futures market: Overnight, LME copper opened at $9,727.0/mt, hitting a high of $9,728.0/mt and a low of $9,669.0/mt, showing a fluctuating trend. It finally closed at $9,692.5/mt, up $2.5/mt or 0.03% from the previous trading day, with a trading volume of 21,210 and open interest reaching 303,022. Overnight, the SHFE copper 2505 contract opened at 79,910 yuan/mt, hitting a high of 80,110 yuan/mt and a low of 79,580 yuan/mt, showing a fluctuating trend. It finally closed at 79,820 yuan/mt, down 80 yuan/mt or 0.10% from the previous trading day, with a trading volume of 53,996 and open interest reaching 195,706.

[SMM Copper Morning Meeting Summary] News: (1) US trade policy - ① Trump is scheduled to deliver a speech at the White House Rose Garden at 4:00 AM Beijing time on Thursday; ② Sources: Trump is unlikely to specify any tariffs on drugs on Wednesday; ③ The Washington Post: White House aides have drafted a proposal to impose tariffs of about 20% on at least most goods imported into the US; ④ White House: Tariffs announced on Wednesday will take effect immediately; ⑤ The Wall Street Journal: The Office of the US Trade Representative is preparing a new tariff option for Trump, which would impose comprehensive tariffs on a group of countries, with rates potentially lower than the 20% universal tariff; ⑥ CNBC: Treasury Secretary Besant stated that the tariffs announced on Wednesday will be the ceiling, and countries can take measures to seek tariff reductions afterward.

(2) US Fed - Daly: Uncertainty has not caused businesses to stagnate; Barkin: The bond market reflects more recession risks, and tariffs will pose challenges to inflation and employment.

Spot: (1) Shanghai: On April 1, spot #1 copper cathode against the front-month 2504 contract was quoted at a discount of 10 yuan/mt to a premium of 30 yuan/mt, with an average premium of 10 yuan/mt, down 5 yuan/mt from the previous trading day. After returning to transactions with invoices dated this month, market selling sentiment increased significantly, with active offers and improved transactions in the early market. Downstream pickup volume also improved compared to before, and spot demand for copper prices showed short-term recovery after last week's pullback. Premiums are expected to continue rising today.

(2) Guangdong: On April 1, spot #1 copper cathode in Guangdong against the front-month contract was quoted at a discount of 20 yuan/mt to a premium of 40 yuan/mt, with an average premium of 10 yuan/mt, unchanged from the previous trading day. Overall, copper prices stopped falling and rebounded, prompting downstream companies to start restocking, with overall trading better than the previous trading day.

(3) Imported copper: On April 1, warrant prices ranged from $67/mt to $73/mt, QP April, with the average price unchanged from the previous trading day; B/L prices ranged from $92/mt to $100/mt, QP May, with the average price unchanged from the previous trading day. EQ copper (CIF B/L) ranged from $32/mt to $42/mt, QP April, with the average price unchanged from the previous trading day, referencing cargoes arriving in early to mid-April. Yesterday, the SHFE/LME price ratio against the SHFE copper 2504 contract was around -700 yuan/mt, with LME copper 3M-Apr at C$30.77/mt, and the spread between April date and May date swap fees around C$17.24/mt. As the price ratio gradually rebounded, market activity increased, but the gap between offers and counteroffers remained wide. It was heard that EQ cargoes arriving in mid-April were traded at $25-30/5QP, while domestic warrant offers remained stable around $70-75/5QP, with buyer counteroffers still at a low of $60, making it difficult to find transactions due to the wide gap. Overall, continuous inventory buildup in bonded zones has put pressure on warrant prices, and sentiment for registered B/L remains cautious.

(4) Secondary copper: On April 1, secondary copper raw material prices remained unchanged MoM, with bare bright copper prices in Guangdong ranging from 73,800 yuan/mt to 74,000 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 1,453 yuan/mt, up 95 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,140 yuan/mt. According to the SMM survey, as copper prices rebounded, secondary copper rod enterprises reported normal raw material procurement yesterday. If copper prices continue to rise, suppliers may hold back sales again in anticipation of higher prices.

(5) Inventory: On April 1, LME copper inventories increased by 1,900 mt to 213,275 mt; on April 1, SHFE warrant inventories decreased by 1,457 mt to 136,003 mt.

Price: On the macro front, Trump is expected to announce reciprocal tariffs at 4:00 AM Beijing time on April 3. Recent news includes: The Washington Post: White House aides have drafted a proposal to impose tariffs of about 20% on at least most goods imported into the US; White House: Tariffs announced on Wednesday will take effect immediately; The Wall Street Journal: The Office of the US Trade Representative is preparing a new tariff option for Trump, which would impose comprehensive tariffs on a group of countries, with rates potentially lower than the 20% universal tariff; CNBC: Treasury Secretary Besant stated that the tariffs announced on Wednesday will be the ceiling, and countries can take measures to seek tariff reductions afterward. Amid market caution, copper prices fluctuated rangebound, with mixed performance in SHFE and LME. On the fundamental side, after copper prices pulled back, spot transactions improved, with short-term demand showing some recovery, and premiums and discounts slightly increased. Overall, as the US reciprocal tariff announcement approaches, market caution remains high, and copper prices are expected to maintain recent low levels today.

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[The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions cautiously and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]