US retail data shows a rebound, and copper prices stop falling and rebound overnight [SMM Copper Morning Meeting Summary]

Futures market: Overnight, LME copper opened at $9,606.5/mt, initially touched a low of $9,597/mt, then fluctuated upward rangebound, and finally closed at $9,678/mt, up 0.43%, with trading volume at 11,000 lots and open interest at 268,000 lots. Overnight, the most-traded SHFE copper 2508 contract opened and touched a low of 77,800 yuan/mt, then fluctuated upward, approaching a high of 78,310 yuan/mt before pulling back slightly to close at 78,260 yuan/mt, up 0.46%, with trading volume at 19,000 lots and open interest at 151,000 lots.
[SMM Copper Morning Meeting Summary] News: (1) Rio Tinto released its Q2 2025 production results. Copper equivalent production rose 13% YoY in Q2 and 6% YoY in H1, mainly driven by strong copper performance and contributions from the acquisition of Arcadium Lithium. Rio Tinto expects copper production to reach the higher end of its annual guidance, with unit costs trending toward the lower end.
Spot market: (1) Shanghai: On July 17, SMM #1 copper cathode spot prices against the front-month 2508 contract were at premiums of 60-150 yuan/mt, averaging 105 yuan/mt, up 10 yuan/mt from the previous day. SMM #1 copper cathode prices ranged from 77,950 to 78,090 yuan/mt. In early trading, the SHFE copper 2508 contract fluctuated rangebound between 77,880 and 77,950 yuan/mt, while the price spread between futures contracts alternated between contango and backwardation structures. Against the backdrop of warrant outflows, spot premiums may decline further.
Guangdong: On July 17, Guangdong #1 copper cathode spot prices against the front-month contract were at premiums of 30-100 yuan/mt, averaging 65 yuan/mt, up 5 yuan/mt from the previous day. SX-EW copper was quoted at discounts of 30-10 yuan/mt, averaging 20 yuan/mt, up 10 yuan/mt from the previous day. The average price of Guangdong #1 copper cathode was 77,965 yuan/mt, down 105 yuan/mt from the previous day, while SX-EW copper averaged 77,880 yuan/mt, up 100 yuan/mt. Overall, suppliers refused to budge on prices amid lower copper prices, but trading was sluggish, with premiums jumping initially and then pulling back.
(3) Imported copper: On July 17, warrant prices were $44-54/mt, QP August, averaging $1/mt lower than the previous day. B/L prices were $56-74/mt, QP August, averaging $1/mt lower than the previous day. EQ copper (CIF B/L) was $22-34/mt, QP July, averaging $1/mt lower than the previous day, with offers referencing cargoes arriving in late July and early August. Overall, the spot market was sluggish, with most suppliers opting to wait and watch the SHFE/LME price ratio.
(4) Secondary copper: On July 17, the price of recycled copper raw materials remained flat MoM. The price of bare bright copper in Guangdong was 72,600-72,800 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap stood at 665 yuan/mt, down 120 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 500 yuan/mt. According to the SMM survey, copper prices continued to trend lower during the week, but secondary copper rod enterprises and copper anode enterprises reported different situations. Secondary copper rod enterprises noted that some suppliers of recycled copper raw materials, fearing further price declines, rushed to deliver materials to rod plants for weighing and settlement. Additionally, towards the week's end, secondary copper rod prices reached parity with or even a premium to copper prices. Some suppliers calculated raw material prices based on secondary rod prices, leading to rising costs for both secondary rod and anode materials due to the rod price increase. This made it difficult for anode enterprises to procure raw materials.
(5) Inventories: On July 17, LME copper cathode inventories rose by 1,150 mt to 122,150 mt. SHFE warrant inventories fell by 8,103 mt to 42,139 mt on the same day.
Prices: Macro side, the US Commerce Department reported on Thursday that June retail sales, often referred to as the "terror data," grew 0.6% MoM, rebounding from May's sharp 0.9% decline and significantly exceeding market expectations of 0.1% growth. As tariff impacts began affecting consumer prices, US Fed officials remained divided on interest rate cuts. Additionally, Thailand announced plans to exempt 90% of US goods from tariffs, while the EU proposed new service tariffs and export controls on the US, indicating continued macro uncertainty. Supply side, standard-quality copper remained scarce, with some high-quality copper supply replenished, while SX-EW copper stayed tight. Demand side, suppliers maintained high premiums during the day, but early SHFE copper price declines dampened market sentiment, with downstream buyers remaining cautious and procurement activity subdued. Inventory side, as of Thursday July 17, SMM survey showed copper inventories in mainstream Chinese regions fell by 4,300 mt from Monday to 143,300 mt, down 400 mt WoW from the previous Thursday, ending two consecutive weeks of increases. Price side, current macro and fundamental bearish factors suggest copper prices may continue facing upward pressure today.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should exercise caution in decision-making and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]