China and the US Announce Pressure Relief, Copper Prices Hold Up Well [Institution Comment]

On Monday, the most-traded SHFE copper contract fluctuated upward, while LME copper encountered resistance at $9,600 per mt last night and pulled back. The domestic near-month B structure narrowed. On Monday, the spot copper cathode market in China saw sluggish transactions, with a strong wait-and-see atmosphere among downstream buyers. Domestic trade copper prices fell to a discount of 15 yuan/mt. Yesterday, LME inventory dropped to 191,000 mt. On the macro front: The joint statement issued by the China-US economic and trade talks eased pressure on the global economy, as both countries retained a relatively low tariff rate of 10% on each other's goods. The US side suspended the imposition of additional tariffs on the remaining 24% of Chinese goods for 90 days, and China reciprocated by suspending or canceling non-tariff countermeasures against the US. In addition, both sides agreed to establish a dialogue mechanism to continue consultations on economic and trade relations. Xinhua News Agency commented that China and the US would strengthen cooperation on the basis of mutual benefit and win-win results, and manage differences on the premise of mutual respect. This talk was a step on a long journey, and the road ahead still requires both sides to jointly explore and shape it with wisdom and courage. On the industrial front: First Quantum Minerals currently maintains a cautiously optimistic attitude towards the production resumption of the Panama copper mine, as the government has expressed interest in establishing a new cooperation mechanism to strengthen the state's ownership of the mine.

The joint statement issued by the China-US economic and trade talks eased pressure on the global economy, with both sides retaining a relatively low tariff rate of only 10% and committing to continue consultations on economic and trade relations. The People's Bank of China (PBOC) introduced a package of incremental financial policies to stabilize market confidence. On the fundamental front: There is no hope for the Panama project to resume production this year. Visible inventory in non-US regions remains low, with the Yangshan copper B/L premium exceeding $110. As China enters the peak season, demand is robust, and the fundamentals will continue to provide strong support. However, the rebound in the US dollar index limits the upward movement of copper prices. It is expected that copper prices will hold up well in the short term.

(Source: Jinyuan Futures)