China-U.S. trade negotiations proceeded as scheduled, providing support for copper prices [SMM Copper Morning Meeting Summary]

Futures Market: Overnight, LME copper opened at $9,728.0/mt, hitting a low of $9,719.5/mt at the start of trading before fluctuating upward, reaching a high of $9,805.5/mt during the session, and eventually closing at $9,768.5/mt, up 1.01%. Trading volume reached 14,115 lots, and open interest stood at 285,334 lots. The overall trend saw prices fluctuating upward to a high before pulling back, presenting a volatile state. Overnight, SHFE copper 2507 opened at 78,920 yuan/mt, reaching a high of 79,470 yuan/mt and a low of 78,920 yuan/mt during the session, and eventually closing at 79,330 yuan/mt, up 0.84%. Trading volume reached 38,243 lots, and open interest stood at 207,020 lots. The overall trend saw prices fluctuating upward to a high before pulling back somewhat, presenting an adjusted state after fluctuating upward.

[SMM Copper Morning Meeting Summary] News: (1) He Lifeng, Member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, and the U.S. side commenced the first meeting of the China-U.S. Economic and Trade Consultation Mechanism in London, UK.

(2) China's new regulations on rare earth export controls represent an active alignment with international norms, with the core legal basis lying in the "dual-use" nature of rare earth items. China aims to "regulate exports" rather than "ban them," and to "facilitate compliant trade" rather than sever normal business ties. The Ministry of Commerce of China has repeatedly and publicly stated that it will approve applications that comply with regulations in accordance with the law.

Spot: (1) Shanghai: On June 9, SMM #1 copper cathode spot prices were quoted at a premium of 20-150 yuan/mt against the front-month 2506 contract, with an average premium of 85 yuan/mt, up 10 yuan/mt MoM. As delivery approaches today, low-priced supplies are hard to come by. The spot market will be guided by the price spread between futures contracts in the latter half of the week, and it is expected that low-priced supplies will continue to be traded at a small premium today.

(2) Guangdong: On June 9, Guangdong #1 copper cathode spot prices were quoted at a discount of 10 yuan/mt to a premium of 120 yuan/mt against the front-month contract, with an average premium of 55 yuan/mt, up 55 yuan/mt MoM. Overall, inventory continued to decline after the weekend, and suppliers actively refused to budge on prices when selling, with overall trading activity being moderate.

(3) Imported copper: On June 9, warrant prices ranged from $37 to $49/mt, with a QP of June, and the average price was up $2/mt MoM. B/L prices ranged from $52 to $80/mt, with a QP of July, and the average price was up $1/mt MoM. EQ copper (CIF B/L) prices ranged from $10 to $20/mt, with a QP of July, and the average price was up $1/mt MoM. Quotations referenced cargoes arriving in mid-to-late June. Overall, the market was inactive yesterday, with both buyers and sellers waiting for further market developments.

(4) Secondary copper: On June 9, the prices of secondary copper raw materials remained unchanged MoM. In Guangdong, bare bright copper prices ranged from 72,700 to 72,900 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 1,388 yuan/mt, also unchanged MoM. The price difference between copper cathode rod and secondary copper rod was 1,155 yuan/mt. According to the SMM survey, copper prices rose during the midday trading session. Suppliers of secondary copper raw materials responded swiftly by raising their selling prices or even halting shipments. Many secondary copper rod enterprises noted that the abnormal fluctuations in copper prices were largely due to the optimistic expectations surrounding the Sino-US trade negotiations. However, the market sentiment is expected to remain bullish for only a short period.

(5) Inventory: On June 9, LME copper cathode inventories decreased by 10,000 mt to 122,400 mt. On the same day, SHFE warrant inventories increased by 1,964 mt to 34,242 mt.

Price: On the macro front, the first meeting of the Sino-US economic and trade consultation mechanism was held in London, UK, on the afternoon of June 9 (local time). Yuyuantantian learned that the meeting would continue on June 10 (local time). During the Sino-US negotiations, the US dollar index was in the doldrums amid concerns over trade prospects and expectations of an end to the easing cycle in the Eurozone, boosting copper prices. On the fundamental front, as the delivery date approaches, there are still price differences between brands, and it is difficult to find low-priced spot cargo in the market. Spot prices are expected to be guided by the price spread between futures contracts. Overall, there are expectations of a trade easing during the Sino-US negotiations, and copper prices are expected to receive some support today.

》Click to view the SMM Metal Database

[The above information is based on market collection and comprehensive assessment 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 cautious decisions and should not rely on this information to replace their own independent judgment. Any decisions made by clients are not related to SMM.]