The US dollar index closed lower for six consecutive months, while copper futures overnight fluctuated at highs [SMM Copper Morning Meeting Summary]

Futures: Overnight LME copper opened at $9,843.5/mt, dipped to $9,812/mt early in the session, then fluctuated upward throughout the day, peaking at $9,881/mt near the close before settling at $9,879/mt with a 0.01% loss. Trading volume reached 18,000 lots and open interest stood at 292,000 lots. The most-traded SHFE copper 2508 contract opened at 79,630 yuan/mt, dipped to 79,560 yuan/mt initially, then rose steadily to peak at 79,910 yuan/mt before pulling back slightly to close at 79,780 yuan/mt with a 0.01% gain. Trading volume reached 32,000 lots and open interest stood at 211,000 lots.
[SMM Copper Morning Meeting Summary] News: (1) Zijin Mining's June 30 announcement: Zijin Gold International Limited (the entity proposed for spin-off listing on the Hong Kong Stock Exchange), a wholly-owned subsidiary of the company, and its Singapore-based subsidiary Jinha (Singapore) Mining Pte. Ltd., signed an agreement with Cantech S.à.r.l. on June 29, 2025 (Beijing Time). Jinha Mining proposes to acquire 100% equity interests in RG Gold LLP and RG Processing LLP held by Cantech, thereby obtaining 100% equity in the Raygorodok gold project in Kazakhstan.
Spot Market: (1) Shanghai: On June 30, SMM #1 copper cathode spot premiums against the front-month 2507 contract were reported at 100-160 yuan/mt, averaging 130 yuan/mt, up 20 yuan/mt from the previous session. SMM #1 copper cathode prices stood at 79,860-80,120 yuan/mt. Early SHFE copper futures fluctuated wildly, briefly spiking to 80,080 yuan/mt before plunging to 79,690 yuan/mt, then rebounding on short-covering to return near 80,000 yuan/mt by the morning close. The backwardation spread between nearby contracts widened, fluctuating between 150-210 yuan/mt during the morning session. Trading activity remained stalemated as traders actively sought lower-priced cargoes in the final trading days of the month. Spot premiums are expected to remain firm on July 1 but could face pressure from widening spreads.
(2) Guangdong: On June 30, Guangdong #1 copper cathode spot premiums against the front-month contract stood at 30-100 yuan/mt, averaging 65 yuan/mt, down 30 yuan/mt from the previous session. SX-EW copper was quoted at discounts of 30-10 yuan/mt, averaging 20 yuan/mt discount, down 10 yuan/mt from the previous session. Guangdong #1 copper cathode averaged 79,940 yuan/mt, down 130 yuan/mt from the previous session, while SX-EW copper averaged 79,850 yuan/mt, down 110 yuan/mt. Trading activity remained mediocre amid year-end settlements, with weaker overall participation compared to last Friday.
(3) Imported Copper: On June 30, warrant prices ranged $20-40/mt with QP July, averaging $7/mt lower than the previous trading day; B/L prices stood at $30-70/mt with QP July, averaging $8/mt lower day-on-day. EQ copper (CIF B/L) was quoted at -$5/mt to $7/mt with QP July, averaging $4/mt lower than the prior session. Quotes referenced cargoes arriving mid-to-early July. Overall, July-arrival re-export B/L transactions nearly concluded, with market focus returning to export logic. Yangshan copper premium warrant prices continued trending downward.
(4) Secondary Copper: On June 30, secondary copper raw material prices fell 100 yuan/mt MoM. Guangdong bare bright copper prices reached 73,200-73,400 yuan/mt, down 100 yuan/mt from the previous day. The copper cathode-scrap price spread stood at 2,131 yuan/mt, widening 166 yuan/mt MoM, while the copper cathode rod-secondary rod spread reached 1,495 yuan/mt. SMM surveys indicate further expansion of these spreads, though secondary copper rod enterprises actively procured raw materials amid suppliers' heightened willingness to sell, keeping intra-day secondary copper raw material transactions brisk.
(5) Inventories: On June 30, LME copper inventories decreased by 650 mt to 90,625 mt; SHFE warrant inventories rose by 505 mt to 25,851 mt.
Price: Macro drivers - Some US Fed officials signaled expectations for one more 2024 interest rate cut, coupled with market speculation that Trump might replace Powell with a dovish candidate. These factors boosted Fed rate cut bets, causing the US dollar index to post its sixth consecutive monthly decline - the steepest since the early 1970s - providing bullish support for copper prices. Fundamentals - Supply side: As quarter-end approached, most enterprises halted spot trading. Some suppliers refused to budge on prices, reducing sell-side liquidity and tightening available spot cargo supplies. As of Monday, June 30, SMM's national mainstream copper inventories decreased 4,000 mt WoW to 126,100 mt, with only Shanghai stocks declining. Total inventories were 273,000 mt lower YoY, as Shanghai, Guangdong, and Jiangsu inventories all remained below 2024 levels. Price outlook: With potential tariff hikes looming on July 9 (pending Trump's decisions) and the US dollar index near multi-decade lows amid trade policy uncertainty, copper prices are expected to maintain highs in the near term.
[The information provided is for reference only and does not constitute direct investment research advice. Clients should exercise caution, avoid relying solely on this analysis, and make independent judgments. SMM bears no responsibility for clients' trading decisions.]