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On the fundamental side, if the 50% tariff is fully implemented, it may force the US to switch to domestic procurement, loosening copper supply in non-US regions. However, the market is currently grappling with the outcome of the tariff's final implementation and the progress of major copper-producing countries like Chile in seeking exemptions, lacking clear directional guidance in the short term. The spot market is awaiting clarification on key policies. Domestically, under tariff expectations, the market's anticipation for a narrowing of the high backwardation structure of SHFE copper has increased, prompting suppliers to sell off spot cargoes in large quantities, leading to a significant decline in spot premiums during the week.
Looking ahead to next week, under the expectation of US tariffs, the LME structure is expected to revert from backwardation to Contango, with the weakening US siphoning effect causing LME copper prices to encounter resistance. It is anticipated that LME copper will fluctuate between $9,600-$9,800/mt next week, while SHFE copper will fluctuate between 77,000-78,500 yuan/mt. On the spot front, next week marks the delivery period for the SHFE copper 2507 contract. With continued weakness in both domestic supply and demand, and some domestic smelters canceling exports, domestic premiums will continue to face pressure. It is expected that spot prices against the SHFE copper 2507 contract will range from a discount of 80 yuan/mt to a premium of 220 yuan/mt.
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