Copper cathode supply remains stable, with copper prices still supported below [SMM Copper Morning Meeting Summary]

Futures: LME copper opened at $9,685/mt overnight, fluctuated considerably in early trading and climbed to $9,708/mt, then the price center gradually moved downward and hit bottom at $9,662.5/mt, before fluctuating considerably again and finally closing at $9,674/mt, up 0.41%, with trading volume at 12,000 lots and open interest at 265,000 lots. SHFE copper 2509 contract opened at 78,380 yuan/mt overnight, touched a high of 78,490 yuan/mt in early trading, then the price center gradually moved downward to 78,230 yuan/mt, before gradually rebounding and finally closing at 78,360 yuan/mt, up 0.26%, with trading volume at 17,000 lots and open interest at 156,000 lots.

[SMM Copper Morning Meeting Summary] News: (1) US President Trump announced that a 100% tariff will be imposed on all imported products containing semiconductors, but exemptions will be granted to companies that have already or explicitly committed to relocating production to the US.

Trump made the announcement alongside Apple CEO Tim Cook in the Oval Office of the White House. Apple announced it will invest an additional $100 billion in the US.

(2) According to media reports, Indian Prime Minister Modi will visit China from August 31 to September 1 and attend the Shanghai Cooperation Organization Tianjin Summit.

Spot: (1) Shanghai: On August 6, SMM #1 copper cathode spot prices against the front-month 2508 contract were at premiums of 50-150 yuan/mt, with the average premium at 100 yuan/mt, down 30 yuan/mt MoM. Copper prices are expected to remain stable above 78,000 yuan/mt today, but downstream new orders are insufficient, and procurement demand is likely to be suppressed, with spot premiums still at risk of further decline.

(2) Guangdong: On August 6, Guangdong #1 copper cathode spot prices against the front-month contract were at discounts of 110 yuan/mt to premiums of 0 yuan/mt, with the average discount at 55 yuan/mt, flat MoM. Overall, consumption improved and inventory declined, but spot premiums remained at low levels.

(3) Imported copper: On August 6, warrant prices were $40-52/mt, QP August, with the average price flat MoM; B/L prices were $50-64/mt, QP September, with the average price up $1/mt MoM; EQ copper (CIF B/L) was $16-28/mt, QP September, with the average price flat MoM. Offers referred to cargoes arriving in mid-to-late August. Overall, activity among buyers and sellers increased, and premiums recovered after hitting bottom.

(4) Secondary copper: At 11:30 on August 6, the futures closing price was 78,220 yuan/mt, down 250 yuan/mt from the previous trading day, with the average spot premiums/discounts at 100 yuan/mt, down 30 yuan/mt from the previous trading day. Today, recycled copper raw materials prices fell 100 yuan/mt MoM, Guangdong bare bright copper prices were 72,900-73,100 yuan/mt, down 100 yuan/mt from the previous trading day, and the price difference between copper cathode and copper scrap was 660 yuan/mt, down 174 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod stood at 500 yuan/mt. According to the SMM survey, as copper prices continued to pull back, secondary copper rod sales remained sluggish, leading to varying degrees of inventory buildup at some secondary copper rod enterprises. The enterprise with the highest finished product inventories held nearly 600 mt of spot cargo.

(5) Inventories: On August 5, LME copper cathode inventories rose by 2,275 mt to 156,125 mt. On August 6, SHFE warrant inventories increased by 1,579 mt to 20,346 mt.

Prices: Macro-wise, Trump announced plans to appoint an interim director and impose a 100% tariff on imported chips, boosting market risk-off sentiment. Meanwhile, US Fed official Kashkari expressed support for two interest rate cuts within the year, increasing expectations for rate cuts and lifting copper prices. Supply side, overall stability persisted with limited circulation of non-mainstream brands, while demand side remained steady. Overall, copper prices are expected to maintain support today.

[Data source statement: Except for publicly available information, other data are derived from public information, market exchanges, and SMM's internal database model, processed by SMM for reference only and not constituting decision-making advice.]

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