Uncertainty remains over US tariff issues, copper prices encounter resistance [SMM Copper Morning Meeting Summary]

Futures Market: On Friday evening, LME copper opened at $9,872/mt, initially touching $9,896/mt before fluctuating downward significantly. It later dipped to $9,848/mt near the session close and settled at $9,852/mt, marking a 1% decline. Trading volume reached 12,000 lots, while open interest stood at 284,000 lots. The most-traded SHFE copper 2508 contract opened at 79,810 yuan/mt on Friday evening, initially surging to 79,950 yuan/mt before drifting lower. Copper prices consolidated sideways with a downward-biased center and eventually bottomed at 79,720 yuan/mt, closing 0.56% lower. Trading volume reached 17,000 lots, and open interest stood at 212,000 lots.

[SMM Morning Copper Meeting Summary] News: (1) With the July 9 tariff deadline approaching, global markets face a critical week. US Treasury Secretary Betsy Devos reversed course, stating August 1 would be the final deadline for trade partners. While India nears a mini trade deal, it drew red lines on agriculture and dairy sectors. The Trump administration plans to reimpose reciprocal tariffs of 10-70% on dozens of countries after the 90-day suspension expires. As Wednesday's deadline nears, the US may resume tariffs on multiple nations.

(2) Yuzhuo Zhang, Secretary of the CPC Committee and Director of the State-owned Assets Supervision and Administration Commission (SASAC), visited China Nonferrous Metal Mining Group. Zhang emphasized enhancing critical metal/mineral resource security, accelerating integrated development across nonferrous metals exploration, investment, development, construction, smelting, and processing. He urged implementing a new round of mineral exploration breakthrough strategies, boosting reserves/production of key metals, and projecting a positive image for central SOEs in "going global" initiatives.

Spot Market: (1) Shanghai: On July 4, SMM #1 copper cathode spot premiums against the SHFE copper 2507 contract were reported at a premium of 70-160 yuan/mt, averaging 115 yuan/mt, unchanged MoM. Looking ahead, copper prices may face correction pressure, and Shanghai spot premiums are expected to stop falling and stabilize.

(2) Guangdong: On July 4, Guangdong #1 copper cathode spot premiums against the front-month contract ranged from a discount of 10 yuan/mt to a premium of 60 yuan/mt, averaging 25 yuan/mt, down 40 yuan/mt MoM. Overall, downstream enterprises maintain bearish sentiment, causing spot premiums to decline continuously.

(3) Imported Copper: On July 4, warrant prices stood at $20-40/mt (QP July), unchanged MoM on average. B/L prices reached $34-70/mt (QP July), up $3/mt on average. EQ copper (CIF B/L) premiums ranged from -$11/mt to $7/mt (QP July), averaging $1/mt higher MoM. Quotes referenced cargoes arriving mid-to-late July. The market remained sluggish overall, with limited activity from downstream buyers.

(4) Secondary copper: On July 4, secondary copper raw material prices decreased by 200 yuan/mt MoM. Guangdong bare bright copper was priced at 74,000-74,200 yuan/mt, down 200 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap stood at 1,705 yuan/mt, narrowing by 277 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,320 yuan/mt. According to an SMM survey, overseas copper prices pulled back, but secondary copper raw material import traders indicated overseas quotation coefficients remained unchanged. Suppliers stated they would not adjust coefficients unless overseas suppliers significantly increased shipment volumes.

(5) Inventories: On July 4, LME copper cathode inventories rose by 950 mt to 95,275 mt; on July 7, SHFE warrant inventories decreased by 1,796 mt to 22,307 mt.

Prices: On the macro front, Trump announced potential issuance of 12-15 tariff-related letters on Monday while signing the "big and beautiful" tax and spending bill. Uncertainty surrounding tariffs placed upward resistance on copper prices. Market focus shifted to Trump's July 9 deadline for tariff suspensions, after which the US would impose reciprocal tariffs on countries without trade agreements. US Treasury Secretary Bessent noted major agreements were nearing completion, and tariff rates would revert to April levels starting August 1 for countries failing to reach deals post-letter receipt. Fundamentally, mainstream standard-quality and high-quality copper remained tight last week, though spot copper market conditions slightly eased following Russian cargo arrivals. Combined with tariff uncertainties and easing spot market conditions, copper prices encountered upward resistance.

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[The above information is based on market collection and comprehensive assessments by the SMM research team, provided for reference only. This document does not constitute direct advice for investment decisions. Clients should exercise caution and avoid substituting independent judgment with this information. SMM bears no responsibility for clients' decisions.]