Futures Market: On Friday evening, LME copper opened at $9,449.0/mt, hitting a low of $9,415.0/mt shortly after the opening bell. It then rebounded, reaching a high of $9,479.5/mt during the session, before oscillating and eventually closing at $9,439.0/mt, down 0.37%. Trading volume was 16,230 lots, and open interest stood at 295,096 lots. On the same evening, the SHFE copper 2506 contract opened at 77,950 yuan/mt. Prices rose early in the session, hitting a high of 78,090 yuan/mt, before oscillating and pulling back to a low of 77,720 yuan/mt. It eventually closed at 77,780 yuan/mt, up 0.15%. Trading volume was 41,198 lots, and open interest was 179,386 lots.
[SMM Copper Morning Meeting Summary] News: (1) Trump's major announcement: He will unveil one of the most important and influential pieces of content. Trump stated that he will sign an executive order to immediately reduce drug prices by 30%-80%. (2) On Friday, as the market awaited the US-China talks, the US dollar index softened, hitting a low of 100.08 before eventually closing down 0.21% at 100.42.
Spot: (1) Shanghai: On May 9, SMM #1 copper cathode spot prices were quoted at a premium of 20 yuan/mt to a premium of 140 yuan/mt against the front-month 2505 contract, with an average premium of 80 yuan/mt, down 145 yuan/mt from the previous trading day. As the delivery deadline approaches this week, the current open interest in the front-month contract remains significantly higher than the deliverable warrants. It is expected that spot prices will move towards a discount amid high price spreads between futures contracts.
(2) Guangdong: On May 9, Guangdong #1 copper cathode spot prices were quoted at a premium of 90 yuan/mt to a premium of 220 yuan/mt against the front-month contract, with an average premium of 155 yuan/mt, down 40 yuan/mt from the previous trading day. Overall, as the price spread between futures contracts continues to widen, downstream restocking sentiment remains weak, and spot premiums have significantly declined.
(3) Imported copper: On May 9, warrant prices ranged from $98/mt to $108/mt, with QP May, and the average price increased by $1/mt from the previous trading day. B/L prices ranged from $108/mt to $126/mt, with QP May, and the average price increased by $1/mt from the previous trading day. EQ copper (CIF B/L) prices ranged from $72/mt to $84/mt, with QP May, and the average price increased by $2/mt from the previous trading day. Quotations are based on cargoes expected to arrive in mid-to-late May.
(4) Secondary copper: On May 9, the price of secondary copper raw materials remained unchanged MoM. Guangdong bare bright copper prices ranged from 72,200 yuan/mt to 72,400 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 1,295 yuan/mt, down 315 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,205 yuan/mt. According to an SMM survey, a secondary copper raw material trader in Ningbo stated that before the Labour Day holiday, customs had accumulated a significant number of containers of secondary copper raw materials. After a one-time customs clearance following the holiday, there is currently a small amount of secondary copper raw material inventory in various warehouses within the park. However, considering the moderate restocking sentiment among enterprises after the holiday, it is expected that the supply of secondary copper raw materials will tighten again next week.
(5) Inventory: On May 9, LME copper cathode inventory decreased by 2,500 mt to 191,775 mt; on the same day, SHFE warrant inventory fell by 375 mt to 19,165 mt.
Prices: On the macro front, at a Chinese press conference, it was announced that substantial progress had been made in the high-level economic and trade talks between China and the US, and important consensus had been reached. Both sides agreed to establish a China-US economic and trade consultation mechanism. The two sides will finalise the relevant details as soon as possible and release a joint statement on the talks at a press conference on May 12. Trump made a major announcement: one of the most important and influential pieces of content will be released; Trump said he would sign an executive order, which would immediately reduce drug prices by 30%-80%. Due to the wait-and-see attitude towards the outcome of the talks, the US dollar index weakened on Friday evening, and copper prices fluctuated at highs. On the fundamental front, with copper prices remaining high and the price spread between futures contracts continuing to widen, downstream players maintained just-in-time procurement, with low willingness to restock. Although copper cathode inventory continued destocking, with the delivery period approaching and a high price spread between futures contracts, spot cargo is expected to trade at a discount. Overall, the China-US joint statement is expected to be released today, and copper prices are anticipated to have some support today.
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[The above information is based on market collection and comprehensive assessment by the SMM research team. The information provided herein is for reference only. This article does not constitute direct advice for investment research and decision-making. Clients should make cautious decisions and should not rely on this information to replace their own independent judgment. Any decisions made by clients are unrelated to SMM.]
