SHFE Copper Continued Its Weakness, Further Digesting Macro Impacts [SHFE Market Closing Commentary on April 8]

SHFE copper continued to decline in the night session, with the intraday loss slightly narrowing, closing down 1.29%, and the futures price stabilized above the 73,000 level. After the sharp drop in copper prices, demand improved, but the short-term trend of copper prices is anchored to the macro front, and the market continues to digest the impact of trade conflicts.

Currently, the market is still digesting the impact of the escalation of global tariff disputes. Although sentiment has eased, it remains cautious. SHFE copper continued to weaken after hitting the limit down yesterday, but the intraday decline did not intensify. Everbright Futures stated that after the US imposed reciprocal tariffs and announced that copper and precious metals would not be subject to reciprocal tariffs for the time being, a significant pullback in copper prices was expected compared to previous performance. Currently, there is still a price spread of nearly $800/mt between US copper and LME copper. Combined with the US stock market crash, sentiment is expected to remain weak, but further weakness is based on liquidity risks and market panic, not fundamentals.

Recently, copper prices have pulled back significantly, downstream purchasing enthusiasm has increased, and spot premiums have improved. As of the beginning of the week, domestic refined copper social inventory destocking exceeded 10,000 mt according to institutional statistics. Coupled with the still weak copper concentrate TCs, the supply and demand performance is moderate. However, the current copper price is more focused on the direction of macro sentiment, and the boost from fundamentals is temporarily limited. SDIC Futures stated that domestic spot copper quotations remain firm, and premiums have widened, with SMM social inventory reduced to 298,700 mt. Domestic buying interest still supports, and secondary copper raw material supply is tight. However, after the medium- and long-term real economy indicators are actually affected, and the domestic consumption peak season turns weak or destocking is weak, the weak consumption will gradually transmit to upstream supply, opening up a larger downward range.