Copper Prices Ceased Decline and Rebounded, Releasing a Large Number of Warrants [SMM Copper Morning Meeting Summary]

Futures market: On Friday evening, LME copper opened at $8,135/mt, initially dipped to $9,073/mt, then fluctuated upward to a high of $9,188/mt, and finally closed at $9,184/mt, up 2.30% (an increase of $206.5 from the previous close of $8,977.5/mt). The trading volume was 22,062 lots, and the open interest was 293,127 lots. On Friday evening, the most-traded SHFE copper 2506 contract opened at 75,480 yuan/mt, with prices fluctuating during the session, reaching a low of 75,050 yuan/mt and a high of 75,750 yuan/mt, and finally closed at 75,610 yuan/mt, up 890 yuan or 1.19% from the previous close. The trading volume was 45,058 lots, and the open interest was 143,217 lots.

[SMM Copper Morning Meeting Summary] News: (1) On the evening of April 11, Eastern Time, US Customs announced that, based on the memorandum signed by President Trump that day, it would exempt integrated circuits, communication equipment, smartphones, display modules, etc., from the so-called "reciprocal tariffs." Under normal circumstances, this is a positive event for related industries.

(2) The Customs Tariff Commission of the State Council issued an announcement that, starting from April 12, 2025, it will adjust the additional tariff measures on imported goods originating from the US. The additional tariff rate specified in the "Announcement of the Customs Tariff Commission of the State Council on Adjusting Additional Tariff Measures on Imported Goods Originating from the US" (Announcement No. 5 of 2025) will be increased from 84% to 125%.

Spot: (1) Shanghai: On April 11, spot #1 copper cathode against the front-month 2504 contract was quoted at a discount of 30 yuan/mt to a premium of 20 yuan/mt, with an average discount of 5 yuan/mt, down 40 yuan/mt from the previous trading day. The continuous large-scale cancellation of warrants in the Shanghai region increased spot circulation, putting pressure on premiums. Meanwhile, the wide SHFE/LME price ratio attracted traders to actively increase imports, and supply and demand gradually balanced by the end of the week. As the SHFE copper 2504 contract approaches delivery this week, spot premiums are expected to fluctuate around parity.

(2) Guangdong: On April 11, spot #1 copper cathode in Guangdong against the front-month contract was quoted at a discount of 10 yuan/mt to a premium of 90 yuan/mt, with an average premium of 40 yuan/mt, up 5 yuan/mt from the previous trading day. Overall, the large price spread between futures contracts led suppliers to lower prices for shipments, and overall trading was weak.

(3) Imported copper: On April 11, warrant prices ranged from $86/mt to $92/mt, QP April, with the average price flat MoM; B/L prices ranged from $100/mt to $110/mt, QP May, with the average price flat MoM. EQ copper (CIF B/L) was quoted at $55/mt to $65/mt, QP May, with the average price flat MoM, referencing cargoes arriving in mid-to-late April. Overall, market transactions were significantly worse than in previous days, offers pulled back, and new demand was limited after the SHFE/LME price ratio deteriorated.

(4) Secondary copper: On April 11, secondary copper raw material prices fell by 300 yuan/mt MoM. Bare bright copper prices in Guangdong ranged from 68,700 yuan/mt to 68,900 yuan/mt, down 300 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 1,254 yuan/mt, down 240 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 880 yuan/mt. According to the SMM survey, due to limited procurement of secondary copper raw materials, most secondary copper rod enterprises chose to suspend production and wait until they have accumulated enough secondary copper raw materials before resuming production.

(5) Inventory: On April 11, LME copper inventories decreased by 650 mt to 208,775 mt; on April 11, SHFE warrant inventories decreased by 2,960 mt to 86,564 mt.

Price: On the macro front, the US exempted some goods from "reciprocal tariffs." On the evening of April 11, US Customs and Border Protection announced that the federal government had agreed to exempt smartphones, computers, chips, and other electronic products from the so-called "reciprocal tariffs." The Trump administration's flip-flop on import tariffs pushed copper prices to stop falling and rebound. On the fundamental side, copper prices stopped falling and rebounded last week, while a large number of warrants were released, increasing spot circulation and putting pressure on premiums. If copper prices do not fall further, consumption may not have more room to release. Overall, downstream players tend to be cautious as copper prices pull back, and the suspension of tariffs may provide support for copper prices. It is expected that copper prices will not see a significant 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 to replace independent judgment. Any decisions made by clients are not related to SMM.]