Before the holiday, domestic inventory continued to decline significantly, with fundamentals providing support for copper prices [[SMM Copper Morning Meeting Summary]]

Futures Market: Overnight, LME copper opened at $9,374/mt. It fluctuated considerably in the early session, hitting a low of $9,358/mt during the session, then fluctuated upward towards the close and hit a high of $9,415/mt, eventually closing at $9,405.5/mt, up 0.49%. Trading volume reached 11,000 lots, and open interest reached 285,000 lots. Overnight, the most-traded SHFE copper 2506 contract opened at 77,740 yuan/mt. It hit a high of 77,760 yuan/mt in the early session, then pulled back after hitting a high during the session and hit a low of 77,410 yuan/mt. It rebounded towards the close and eventually closed at 77,630 yuan/mt, up 0.34%. Trading volume reached 31,000 lots, and open interest reached 162,000 lots.
【SMM Copper Morning Meeting Summary】News: (1) According to the latest data released by the Shanghai Futures Exchange, SHFE copper inventories continued to decline in the week ending April 25, with weekly inventories decreasing by 31.97% to 116,753 mt, hitting a new low in two and a half months. International copper inventories decreased by 1,967 mt to 13,336 mt.
Spot: (1) Shanghai: On April 28, SMM #1 copper cathode spot premiums against the front-month 2505 contract were reported at a range of a premium of 150 yuan/mt to a premium of 210 yuan/mt, with an average premium of 180 yuan/mt, unchanged from the previous trading day. The SMM #1 copper cathode price was 77,440-77,690 yuan/mt. In the morning session, the SHFE copper 2505 contract reached 77,700 yuan/mt before pulling back, hitting a low near 77,260 yuan/mt around 10 am. The futures market gradually rebounded towards 77,500 yuan/mt around 11 am. The SHFE copper BACK spread between futures contracts fluctuated within 230-270 yuan/mt. Continuous destocking in the Shanghai region kept spot premiums for SHFE copper firm. Moreover, with the Labour Day holiday approaching, downstream purchasing sentiment remained moderate, leading to continuous destocking at warehouses. In the absence of significant import supplements, inventories are expected to continue to decline before the holiday.
(2) Guangdong: On April 28, Guangdong #1 copper cathode spot premiums against the front-month contract were reported at a range of 180 yuan/mt to a premium of 230 yuan/mt, with an average premium of 205 yuan/mt, unchanged from the previous trading day. SX-EW copper premiums were reported at a range of a premium of 120 yuan/mt to a premium of 140 yuan/mt, with an average premium of 130 yuan/mt, unchanged from the previous trading day. The average price of Guangdong #1 copper cathode was 77,620 yuan/mt, down 515 yuan/mt from the previous trading day. The average price of SX-EW copper was 77,545 yuan/mt, down 515 yuan/mt from the previous trading day. Overall, pre-holiday stockpiling was moderate, with suppliers insisting on high premiums for shipments, and overall trading activity remained moderate.
(3) Imported copper: On April 28, warrant prices were $88-98/mt, with a QP of May, and the average price increased by $3/mt from the previous trading day. B/L prices were $105-125/mt, with a QP of May, and the average price increased by $5/mt from the previous trading day. EQ copper (CIF B/L) prices were $65-75/mt, with a QP of May, and the average price increased by $5/mt from the previous trading day. Quotations referenced cargo arrivals in early May. Both buyers and sellers were active in making offers. Due to the continued suspension of production at the Altonorte smelter in Chile, expectations for South American copper cathode port arrivals in May-June have declined. Meanwhile, the departure of copper cathode from the DRC has been hindered, with expectations for tight CIF port arrivals in May. Large traders in the market have accelerated their purchasing activities, driving up premiums.
(4) Secondary copper: On April 28, the price of secondary copper raw materials decreased by 300 yuan/mt MoM. The price of bare bright copper in Guangdong was 71,600-71,800 yuan/mt, down 300 yuan/mt MoM from the previous trading day. The price difference between copper cathode and copper scrap was 1,373 yuan/mt, down 261 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 900 yuan/mt. According to an SMM survey, as the upward momentum of copper prices has begun to weaken, if copper prices remain at current levels in the next two trading days, holders of secondary copper raw materials may refrain from selling. Meanwhile, due to insufficient raw material stockpiling by secondary copper rod enterprises before the long holiday, most enterprises may take 2-3 days off.
(5) Inventories: On April 28, LME copper cathode inventories decreased by 650 mt to 202,800 mt. On April 28, SHFE warrant inventories decreased by 4,704 mt to 36,884 mt.
Price: On the macro front, Tariffs - ① The Atlantic Interview: Trump believes that no red lines will change tariff policies. ② US Treasury Secretary: The first trade agreement may be reached as early as this week or next, with India potentially among the first batch. ③ German Chancellor-designate Merz will urge Trump to eliminate all tariffs. The market is cautiously awaiting further news on trade policies, with the US dollar declining across the board, which is bullish for copper prices. On the fundamental front, from the supply side, as of Monday, April 28, SMM's national mainstream copper inventories decreased by 26,600 mt WoW to 155,100 mt. Compared to the inventory changes last Friday, inventories in all regions across the country have destocked. Continuous destocking in the Shanghai region has kept spot premiums for SHFE copper firm. In the absence of significant import supplements, inventories are expected to continue to decline before the holiday. From the demand side, with the Labour Day holiday approaching, the slight decline in the futures market has led to active cargo pick-up by downstream players. Downstream purchasing sentiment remains moderate, leading to continuous destocking at warehouses. Meanwhile, there are also cases of downstream players continuing to bargain down purchasing prices, showing a certain degree of caution. On the price front, supported by fundamentals, copper prices are expected to still have upside room today.
【The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make cautious decisions and should not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.】