Copper Prices Opened Low and Rose High, Attention on Tariff Implementation [Institutional Commentary]

【Futures Market Review】The SHFE copper index opened lower and closed higher on Tuesday, settling at 80,300 yuan/mt, with spot premiums in Shanghai at 10 yuan/mt.

【Industry Performance】According to industry insiders, the China Smelters Purchase Team (CSPT) held its quarterly meeting today (March 31) and decided not to set a spot purchase guidance price for copper concentrate TCs/RCs for Q2 2025. The spot purchase guidance TCs/RCs for copper concentrates finalized in Q1 this year were $25/mt and 2.5¢/lb.

【Core Logic】Copper prices recently jumped initially and then pulled back, exceeding expectations. The main reason for the volatility in copper prices remains the anticipated US copper tariffs. Bloomberg recently reported that major commodity traders, including Trafigura Group, Glencore Group, and Gunvor Group, are diverting large quantities of copper originally destined for Asia to the US. Some insiders stated that due to the massive volume, traders had to book additional storage space in New Orleans and Baltimore to accommodate these shipments. Energy trader Mercuria estimates that approximately 500,000 mt of copper is en route to the US, significantly higher than the normal monthly import volume of around 70,000 mt. The pullback in copper prices is mainly attributed to the reduction in long positions, with overall open interest in SHFE copper decreasing from 610,000 to 570,000 lots. In the short term, the potential implementation of US tariff policies may cause further volatility in copper prices. Longs may gradually unwind their positions due to the tariff policies, thereby pulling prices lower. Additionally, the price spread between US copper and LME copper may gradually narrow as tariffs are implemented.

(Source: Nanhua Futures)