US Consumer Index Shows Resilience, Copper Prices Jump Initially and Then Pull Back Overnight [SMM Copper Morning Meeting Summary]

Futures Market: Overnight, LME copper opened at $9,583.0/mt. It initially touched a low of $9,571.0/mt at the start of the session, then rose steadily, hitting a high of $9,640.0/mt during the session. It then fluctuated downward overall, eventually closing at $9,596.0/mt, down 0.19%. Trading volume was 15,828 lots, and open interest was 289,893 lots. Overnight, the most-traded SHFE copper 2507 contract opened at 78,160 yuan/mt. Prices fluctuated at the start of the session, hitting a high of 78,240 yuan/mt and a low of 78,020 yuan/mt during the session. It fluctuated overall and eventually closed at 78,100 yuan/mt, up 0.14%. Trading volume was 27,541 lots, and open interest was 164,859 lots.
[SMM Copper Morning Meeting Summary] News: (1) According to Ivanhoe Mines' news on May 26: Kolwezi, Democratic Republic of the Congo – Following the initial announcement on May 20, 2025, of the suspension of underground mining operations at the Kakula mine in the Democratic Republic of the Congo, Robert Friedland, Co-Executive Chairman of Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF), Weibao Hao, Co-Executive Chairman, and Marna Cloete, President and Chief Executive Officer, issued a statement on May 26 regarding the latest operational status of the Kamoa-Kakula mine: Underground mining at the Kakula mine has been suspended, while restoration work in the western zone continues.
Spot: (1) Shanghai: On May 27, SMM #1 copper cathode spot premiums against the front-month 2506 contract were reported at a range of 100-200 yuan/mt, with an average premium of 150 yuan/mt, down 35 yuan/mt from the previous trading day. The SMM #1 copper cathode price was 78,410-78,620 yuan/mt. SHFE copper prices jumped initially and then pulled back in the morning session, reaching a high of 78,440 yuan/mt before sharply declining. It is expected that there will still be imported shipments tomorrow, keeping overall spot premiums suppressed. However, with copper prices remaining high and no signs of widening price spreads between futures contracts, the convergence of spot premiums is expected to be limited.
(2) Guangdong: On May 27, Guangdong #1 copper cathode spot premiums against the front-month contract were reported at 180-260 yuan/mt, with an average premium unchanged from the previous trading day at 220 yuan/mt. SX-EW copper premiums were reported at 120-140 yuan/mt, with an average premium unchanged from the previous trading day at 130 yuan/mt. The average price of Guangdong #1 copper cathode was 78,560 yuan/mt, down 25 yuan/mt from the previous trading day, while the average price of SX-EW copper was 78,470 yuan/mt, also down 25 yuan/mt from the previous trading day. Overall, inventory levels hit a recent low, causing spot premiums to jump initially and then pull back today. Attention should be paid to future arrivals.
(3) Imported Copper: On May 27, warrant prices were $90-98/mt, with a QP of June, and the average price increased by $1/mt from the previous trading day. B/L prices were $98-120/mt, with a QP of June, and the average price increased by $4/mt from the previous trading day. EQ copper (CIF B/L) prices were $72-82/mt, with a QP of June, and the average price remained unchanged from the previous trading day. Quotations were based on cargo arrivals in late May and early June. Overall, market trading was good, but it was noted that the trading was not driven by downstream demand, and EQ and domestic warrant and B/L prices pulled back.
(4) Secondary copper: On May 27, the price of secondary copper raw materials remained unchanged MoM. The price of bare bright copper in Guangdong was 72,400-72,600 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 867 yuan/mt, down 120 yuan/mt WoW. The price difference between copper cathode rod and secondary copper rod was 945 yuan/mt. According to the SMM survey, a Ningbo-based trader of imported secondary copper raw materials said that the supply of secondary raw materials increased slightly this week. As LME copper prices pulled back below 9,600 yuan/mt during the week, many suppliers were concerned about the expansion of losses from price declines, so they slightly increased their shipments this week. In addition, regarding the entry of US copper scrap into China through transshipment or exchange, the trader said they had not heard any related news for the time being. It is expected that the import data for US secondary copper raw materials will show a significant pullback starting from May's data.
(5) Inventory: On May 27, LME copper cathode inventories decreased by 2,575 mt to 162,150 mt. On the same day, SHFE warrant inventories increased by 2,128 mt to 34,961 mt.
Prices: On the macro side, US consumer confidence in May was significantly better than economists' expectations. Supported by the improvement in US consumer confidence, the US dollar index strengthened, suppressing overnight copper prices. Trump expressed great satisfaction with imposing a 50% tariff on the EU, and the EU has called for the prompt determination of negotiation dates. The uncertainty surrounding tariffs also weighed on copper prices. On the fundamental side, imported copper continued to arrive, while downstream purchase sentiment was poor recently, putting pressure on premiums. It is expected that there will still be imported copper shipments today. Overall, with the uncertain tariff outlook and the US dollar index rising again, it is expected that there will be certain pressure on copper prices today.
[The information provided 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 as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]