The US announced reciprocal tariffs, and market concerns are expected to weigh on copper prices. [SMM Copper Morning Meeting Summary]

Futures market: Overnight, LME copper opened at 9,702.0, with the highest price reaching 9,721.0 and the lowest price dropping to 9,670.0, showing a fluctuating trend overall. It finally closed at 9,721.0, up 0.29%, with a trading volume of 16,695 and an open interest of 302,920. Overnight, the SHFE copper 2505 contract opened at 79,840 yuan/mt, with the highest price reaching 79,950 yuan/mt and the lowest price dropping to 79,710 yuan/mt, showing a fluctuating downward trend overall. It finally closed at 79,780 yuan/mt, down 0.13%, with a trading volume of 28,289 and an open interest of 194,696.

【SMM Copper Morning Meeting Summary】News: (1) US trade policy - ① President Trump signed an executive order to set a 10% "minimum benchmark tariff" for all countries and impose reciprocal tariffs, with the EU's reciprocal tariff at 20%, Japan at 24%, Vietnam at 46%, and South Korea at 25%. Tariffs on goods under the USMCA will continue to be exempted, while those not in compliance will remain at 25%; ② The US Treasury Secretary called on countries not to retaliate; ③ The benchmark tariff will take effect on April 5, and the reciprocal tariff will take effect on the 9th. Additionally, a 25% auto tariff will take effect on the 3rd, and auto parts tariffs will take effect on May 3; ④ Gold bars, copper, pharmaceuticals, semiconductors, and wood products are also exempt from "reciprocal tariffs."

Spot: (1) Shanghai: On April 2, spot #1 copper cathode against the front-month 2504 contract was quoted at a premium of 10-50 yuan/mt, with an average premium of 30 yuan/mt, up 20 yuan/mt from the previous trading day. Market transactions in the morning did not show significant improvement, and the increase in premiums was mainly due to downstream firms standing firm on quotes and holding back sales. Before the morning close, some downstream firms actively bargained, leading to a downward shift in the transaction center. Pre-holiday stocking demand for the Qingming Festival is expected to push up spot premiums today.

(2) Guangdong: On April 2, 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, despite the approaching Qingming holiday, downstream restocking demand was not strong, and spot premiums remained flat compared to the previous trading day.

(3) Imported copper: On April 2, warrant prices were quoted at $66-72/mt, QP April, with the average price down $1/mt from the previous trading day; B/L prices were quoted at $92-100/mt, QP May, with the average price unchanged from the previous trading day. EQ copper (CIF B/L) was quoted at $32-42/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 -600 yuan/mt, with LME copper 3M-Apr at C$24.87/mt, and the spread between April and May dates at around C$14.15/mt. The ratio continued to recover yesterday, and some buyers began seeking opportunities to import warrants or near-month EQ B/Ls. It was heard that EQ cargoes arriving in early April were traded at $40-45, QP April-May dates. Domestic warrant offers dropped to around $70/5QP, with a few offers heard at $60/5QP, and buyer counteroffers at the low $60 level, with a small amount of cargo traded. It was heard that registered pyrometallurgy B/Ls for far-month arrivals were offered at $100/6QP, but inquiry interest was weak. Overall, market transactions showed some recovery compared to the previous trading day, with most trades returning to the ratio logic.

(4) Secondary copper: On April 2, secondary copper raw material prices remained unchanged MoM. Bare bright copper prices in Guangdong were quoted at 73,800-74,000 yuan/mt, unchanged from the previous trading day, with the price difference between copper cathode and copper scrap at 1,513 yuan/mt, up 60 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,150 yuan/mt. According to the SMM survey, copper prices fluctuated mainly yesterday, and secondary copper rod enterprises' offers showed no significant change from the previous trading day. Downstream orders recovered slowly, and overall transactions were flat.

(5) Inventory: On April 2, LME copper inventories decreased by 1,400 mt to 211,875 mt; on April 2, SHFE warrant inventories decreased by 5,624 mt to 130,379 mt.

Price: On the macro front, around 4 AM Beijing time on Thursday, US President Trump delivered a speech in the White House Rose Garden. He stated that he would impose a minimum 10% tariff on all exporters to the US and additional tariffs on about 60 countries/regions with the largest trade imbalances with the US. According to senior White House officials, the benchmark tariff rate (10%) will take effect at 4 AM on April 5, and the reciprocal tariff will take effect at 4 AM on April 9. White House documents show that some goods will be exempt from reciprocal tariffs, including: steel/aluminum products and autos/auto parts already subject to Section 232 tariffs; copper, pharmaceuticals, semiconductors, and wood products; all items that may be subject to Section 232 tariffs in the future; gold; and energy and certain other minerals that the US cannot obtain. Trump stated that he would consider lowering the tariff rates if other countries remove trade barriers on US exports. The night session maintained a fluctuating trend while awaiting the announcement of reciprocal tariffs, and after the announcement, market concerns about a trade war resurfaced. On the fundamental side, despite the approaching Qingming Festival, downstream firms remained cautious due to persistently high absolute prices, and pre-holiday stocking demand has not yet emerged. Overall, with the announcement of US reciprocal tariffs, market concerns have increased, and copper prices are expected to decline 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.】