The El Teniente mine will resume operations on Thursday, while LME copper dropped back slightly overnight [SMM Copper Morning Meeting Summary]

Futures: Overnight, LME copper opened at $9,846/mt, initially touching a high of $9,847/mt before fluctuating considerably downward during the session. It approached a low of $9,810.5/mt near the close and finally settled at $9,777/mt, down 0.64%. Trading volume reached 12,000 lots, and open interest stood at 268,000 lots. Overnight, the most-traded SHFE copper 2509 contract opened at 79,290 yuan/mt, initially touching a low of 79,130 yuan/mt before fluctuating considerably upward to a high during the session. It pulled back slightly near the close and finally settled at 79,110 yuan/mt, down 0.29%. Trading volume was 16,000 lots, and open interest was 156,000 lots.
[SMM Copper Morning Meeting Summary] News: (1) On Wednesday, August 13, Chilean mining company Codelco announced that the smelter at its El Teniente mine would resume operations on Thursday. The smelter had been suspended for nearly two weeks following an accident at the mine. Maximo Pacheco, Chairman of Codelco, stated on Wednesday that the suspension resulted in a production loss of 20,000-30,000 mt, valued at approximately $300 million.
Spot: (1) Shanghai: On August 13, SMM #1 copper cathode spot prices against the front-month 2508 contract were at premiums of 140-260 yuan/mt, with the average premium at 200 yuan/mt, unchanged from the previous trading day. SMM #1 copper cathode prices ranged from 79,390 to 79,560 yuan/mt. In the morning session, SHFE copper fluctuated rangebound between 79,240 and 79,330 yuan/mt, closing at 79,280 yuan/mt by midday. The contango structure between nearby months continued, fluctuating between C40 and C10. Imported supply is expected to remain supplemented, putting pressure on premiums, but with domestic supply tight ahead of delivery, spot transactions are expected to remain firm, limiting the downside for spot premiums.
(2) Guangdong: On August 13, Guangdong #1 copper cathode spot prices against the front-month contract ranged from parity to a premium of 50 yuan/mt, with the average premium at 25 yuan/mt, up 15 yuan/mt from the previous trading day. SX-EW copper was quoted at discounts of 70-50 yuan/mt, with the average discount at 60 yuan/mt, up 20 yuan/mt from the previous day. The average price of Guangdong #1 copper cathode was 79,315 yuan/mt, up 380 yuan/mt from the previous day, while the average price of SX-EW copper was 79,230 yuan/mt, up 385 yuan/mt. Overall, with reduced available supply, suppliers refused to budge on prices, and trading activity improved compared to the previous day.
(3) Imported copper: On August 13, warrant prices ranged from $40 to $54/mt, QP August, with the average price flat from the previous trading day. B/L prices ranged from $48 to $60/mt, QP September, with the average price flat from the previous day. EQ copper (CIF B/L) was quoted at $20 to $32/mt, QP September, with the average price flat from the previous day. Offers referenced cargoes arriving in mid-to-late August and early September. Overall, as copper prices continued to rise, market expectations for the August SHFE/LME price ratio were revised downward, weakening spot buying and selling sentiment.
(4) Secondary copper: On August 13, the price of recycled copper raw materials rose 200 yuan/mt MoM. The price of bare bright copper in Guangdong was 73,500-73,700 yuan/mt, up 200 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap stood at 1,182 yuan/mt, up 117 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 880 yuan/mt. According to the SMM survey, the spot price of copper cathode was pushed up by high premiums, which also drove up the price of recycled copper raw materials. However, secondary copper rod enterprises, affected by policy adjustments, only considered purchasing recycled copper raw materials with 13% VAT. Overall, market transactions were mediocre.
(5) Inventory: On August 13, LME copper cathode inventories increased by 875 mt to 155,875 mt. SHFE warrant inventories decreased by 3,496 mt to 22,800 mt on the same day.
Price: Macro side, the US government and the International Energy Agency issued pessimistic supply guidance, while the market remained wary of Trump's threat that Putin would face "serious consequences" if he obstructed peace in Ukraine. Oil prices fell to a two-month low on Wednesday, dragging copper prices lower. Supply side, imported cargoes supplemented the market, but domestic supply tightened ahead of delivery, keeping spot cargo circulation moderate. Demand side, downstream buyers mainly made just-in-time procurement as copper prices fluctuated at highs. Price side, US Treasury Secretary Besant called for "a series of interest rate cuts" on Wednesday, suggesting the US Fed might cut rates by 50 basis points. The US July PPI and initial jobless claims data were due for release, limiting downside room for copper prices.

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