US Issues Non-reciprocal Tariff Notices to Multiple Countries, Copper Prices Under Short-term Pressure [SMM Copper Morning Meeting Summary]

Futures market: Overnight LME copper opened at $9,807/mt. After an initial jump and pullback, copper prices gradually moved upward to touch $9,839/mt, then fluctuated downward and closed at $9,784/mt, down 0.69%. Trading volume reached 11,000 lots and open interest reached 281,000 lots. The most-traded SHFE copper 2508 contract opened at 79,370 yuan/mt overnight, dipping to 79,300 yuan/mt initially before fluctuating upward unilaterally. It approached 79,550 yuan/mt near the close and settled at 79,390 yuan/mt, down 0.15%. Trading volume reached 17,000 lots and open interest reached 204,000 lots.

[SMM Morning Copper Meeting Summary] News: (1) The White House stated on July 7 that 12 additional countries will receive trade-related letters, with more letters to follow. Trump will sign an executive order postponing the tariff negotiation deadline from July 9 to August 1. Xinhua also noted that Levitt confirmed at a July 7 press briefing that Trump plans to extend the 90-day suspension period for "reciprocal tariffs," delaying implementation from July 9 to August 1. This extends tariff negotiations between the Trump administration and trading partners by over three weeks.

(2) Hong Kong's "Stablecoin Ordinance" takes effect in August. Christopher Hui, Secretary for Financial Services and the Treasury of the HKSAR Government, stated on July 7 that the HKMA is consulting the market on implementation guidelines, to be published this month, covering anti-money laundering and related requirements. Hui also clarified that only single-digit stablecoin licenses will be issued, with applications expected after the ordinance takes effect, targeting license issuance within this year.

Spot market: (1) Shanghai: On July 7, SMM #1 copper cathode spot premiums against the front-month 2507 contract were reported at 50-140 yuan/mt, averaging 95 yuan/mt, down 20 yuan/mt MoM. Looking ahead, with widening price spreads and imported supply pressure, spot premiums are expected to have further downside room.

(2) Guangdong: On July 7, Guangdong #1 copper cathode spot premiums against the front-month contract ranged from a discount of 60 yuan/mt to a premium of 50 yuan/mt, averaging a discount of 5 yuan/mt, down 30 yuan/mt MoM. Overall, copper price declines failed to prevent premium reductions, primarily due to downstream reluctance to restock.

(3) Imported copper: On July 7, warrant prices stood at $20-38/mt (QP July), averaging $1/mt lower MoM; B/L prices were $46-80/mt (QP August), averaging $11/mt higher MoM; EQ copper (CIF B/L) was $0-20/mt (QP July), averaging $12/mt higher MoM. Quotations reference mid-to-late July arrival cargoes. Overall, market transactions remained basically flat WoW, while activity among traders increased.

(4) Secondary copper: On July 7, the price of secondary copper raw materials declined by 500 yuan/mt MoM. Guangdong bare bright copper was priced at 73,500-73,700 yuan/mt, down 500 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap stood at 1,507 yuan/mt, narrowing by 198 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,060 yuan/mt. According to the SMM survey, as of H2, many secondary copper rod enterprises have nearly met their production value targets; hence, their subsequent raw material procurement will not be aggressive, and they will appropriately reduce operating days.

(5) Inventory: On July 7, LME copper cathode inventory rose by 2,125 mt to 97,400 mt; on the same day, SHFE warrant inventory fell by 625 mt to 21,682 mt.

Price: On the macro front, the Trump administration issued tariff escalation notices to 14 countries, planning to impose 25% benchmark tariffs on imports from Japan and South Korea starting August 1, apply 25%-40% rates to Malaysia, Indonesia, and others, and levy an additional 10% tariff on BRICS nations aligned with anti-U.S. policies, while postponing the reciprocal tariff suspension period until the effective date. This policy uncertainty heightened market risk aversion, weighing on copper prices. Fundamentals showed that as of July 7, SMM's nationwide copper inventories in major regions increased by 11,100 mt MoM to 142,900 mt, with inventories generally rising across all regions. The combination of rising imported copper volumes and weakening end-use consumption collectively pushed inventory levels higher. In summary, macro policy disturbances and rising fundamental inventories have formed a resonance, compounded by the impact of the traditional consumption off-season, putting downward pressure on copper prices in the short term.

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[The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided herein is for reference only. This article does not constitute direct advice for investment research decisions. Clients should exercise caution in decision-making, refrain from using this as a substitute for independent judgment, and any decisions made by clients are unrelated to SMM.]