The market expects the Section 232 investigation to be postponed, with LME copper briefly touching a high of $10,000/mt [SMM Copper Morning Meeting Summary]

Futures Market: Overnight LME copper opened at $9,927/mt, surged to a session high of $10,000/mt in early trading, then fluctuated upward before pulling back to a session low of $9,917.5/mt. It eventually closed at $9,943/mt, up 0.66% with trading volume reaching 22,000 lots and open interest at 284,000 lots. Overnight SHFE copper's most-traded 2508 contract opened at 80,620 yuan/mt, hit a session high of 80,930 yuan/mt in early trading, then fluctuated downward before dipping to 80,320 yuan/mt near closing. It consolidated sideways at closure, settling at 80,390 yuan/mt with a 0.46% gain, trading volume at 54,000 lots, and open interest at 223,000 lots.
[SMM Copper Morning Briefing] News: (1) Chile's National Institute of Statistics reported copper production reached 486,574 tons in May, up 4.9% MoM (highest level this year) and 9.4% YoY. Domestic copper concentrates supply-demand tightness persists, requiring continued monitoring of major producing countries' output changes.
(2) Panama's Ministry of Trade and Industry stated Monday that over 33,000 metric tons of copper concentrates have been shipped from First Quantum's suspended Cobre Panama mine. The ministry described concentrate extraction as "gradual" without specifying remaining volumes. First Quantum declined to comment.
Spot Market: (1) Shanghai: On July 1, SMM #1 copper cathode spot premiums against the 2507 contract were quoted at 150-250 yuan/mt, averaging 200 yuan/mt, up 70 yuan/mt from the previous session. SMM #1 copper cathode prices stood at 80,120-80,290 yuan/mt. The SHFE copper 2507 contract fell sharply from 80,100 yuan/mt to 79,950 yuan/mt in morning trading before recovering to 80,040 yuan/mt near midday. The spot-futures spread (BACK structure) widened to 250 yuan/mt during the session. Looking ahead, widening spreads may partially suppress premiums, but trading sentiment remains subdued near the 80,000 yuan/mt psychological level, though physical and speculative market activity is expected to improve.
(2) Guangdong: On July 1, Guangdong #1 copper cathode spot premiums against the front-month contract were 50-130 yuan/mt, averaging 90 yuan/mt (up 25 yuan/mt from the previous session). SX-EW copper was quoted at a discount of 10 yuan/mt to a premium of 10 yuan/mt, averaging 0 yuan/mt (up 20 yuan/mt). Guangdong #1 copper cathode averaged 80,075 yuan/mt (+135 yuan/mt), while SX-EW copper averaged 79,985 yuan/mt (+130 yuan/mt). Overall, increased downstream purchases in early July pushed spot premiums higher with better trading activity compared to the previous day.
(3) Imported copper: On July 1, warrant prices stood at $20-40/mt for QP July, with the average unchanged from the previous trading day; B/L prices reached $30-66/mt for QP July, averaging $2/mt lower MoM. EQ copper (CIF B/L) was quoted at -$7/mt to $5/mt for QP July, averaging $2/mt lower MoM, with offers referencing cargoes arriving in mid-to-early July.
(4) Secondary copper: On July 1, secondary copper raw material prices remained unchanged MoM. Guangdong bare bright copper prices held steady at 73,200-73,400 yuan/mt, unchanged from the previous session. The copper cathode-scrap price spread stood at 2,161 yuan/mt, widening by 30 yuan/mt MoM, while the copper cathode rod-secondary copper rod spread reached 1,465 yuan/mt. According to an SMM survey, copper prices surged in the afternoon as the US delayed implementation of the Section 232 copper tariff until September/October, sustaining risk premiums. Secondary copper rod enterprises halted secondary copper raw material procurement, resuming only after copper prices stabilize.
(5) Inventories: On July 1, LME copper cathode inventories increased by 625 mt to 91,250 mt; SHFE warrant inventories decreased by 1,078 mt to 24,773 mt.
Prices: Macro drivers - The 90-day tariff suspension period expires on July 9, with Trump indicating no extension. India seeks a provisional trade deal with the US this week, while Japan faces potential 30-35% tariffs, intensifying market concerns about future policy shifts. The US dollar weakened, providing bullish support for copper. Meanwhile, internal divisions at the US Fed over policy stance deepened. Although Chair Powell reaffirmed independence and a "wait-and-see" approach during the June 24 Senate hearing, market doubts persist about maintaining neutrality under political pressure, potentially further pressuring the dollar. Fundamentals - Demand side: Copper prices near 80,000 yuan/mt significantly dampened downstream procurement sentiment. Although intraday spot premiums opened higher in the morning session, nearly no transactions occurred, with subsequent stabilization relying on trader activities rather than actual downstream purchases. Price outlook: With dollar weakness persisting, copper prices are expected to remain elevated today.
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