Multiple factors drag down copper prices, with the price spread between SHFE copper and BC copper narrowing [SMM BC Copper Commentary]

Today, the most-traded BC copper 2508 contract opened at 69,410 yuan/mt and closed in the red, with the lower Bollinger Band providing support at the bottom. During the night session, the most-traded BC copper contract fluctuated downward initially, reaching an intraday low of 69,370 yuan/mt. Subsequently, the center of copper prices gradually shifted upward, touching an intraday high of 69,870 yuan/mt near the close, and finally closing at 69,810 yuan/mt, marking a decline of 0.47%. Open interest reached 4,464 lots, a decrease of 80 lots from the previous trading day, and trading volume amounted to 7,844 lots. Trump reiterated on social media his plan to impose a 50% tariff on imported copper starting from August 1, 2025. This policy would lead to a relatively loose supply of spot copper in non-US regions, thereby exerting downward pressure on copper prices. Meanwhile, the June minutes of the US Fed indicated that due to disagreements among officials over the inflationary impact of tariffs, the possibility of an interest rate cut in July had been ruled out. The policy uncertainty further dampened market risk appetite and exacerbated the downward pressure on copper prices. On the fundamental side, as of Thursday, July 10, SMM data showed that copper inventories in major regions across the country increased slightly by 800 mt from Monday, reaching 1.4437 million mt, and increased by 11,900 mt from the previous Thursday. Moreover, as the market entered the off-season, downstream demand also showed signs of weakening, with copper prices encountering resistance.

The SHFE copper 2508 contract closed at 78,600 yuan/mt. If based on the most-traded BC copper 2508 contract price of 69,810 yuan/mt, its after-tax price would be 78,885 yuan/mt. The price spread between the SHFE copper 2508 contract and the BC copper contract was -285, maintaining an inversion and narrowing compared to the previous day.