Copper Social Inventory Increased Slightly, Copper Prices Show Upward Pressure [SMM Copper Morning Meeting Summary]

Futures: LME copper opened at $9,737.5/mt overnight. Prices initially fluctuated downward to test $9,722/mt before fluctuating considerably and finally closing at the day's high of $9,752/mt, down 0.08%. Trading volume reached 11,000 lots with open interest at 267,000 lots. The most-traded SHFE copper 2509 contract opened at 78,840 yuan/mt overnight, initially testing 78,890 yuan/mt before fluctuating rangebound to 78,760 yuan/mt, then consolidating sideways to finally close at 78,840 yuan/mt, down 0.23%. Trading volume stood at 11,000 lots with open interest at 145,000 lots. Macro-wise, Ukraine sought $100 billion in arms purchases in exchange for security guarantees, Trump advanced plans for Russia-Ukraine leader talks and trilateral negotiations, Hamas accepted a new Gaza ceasefire proposal, while China's State Council focused on stimulating consumption and stabilizing the property market.

[SMM Copper Morning Brief] News: (1) Ukrainian President Zelensky visited the White House for the first time in six months, meeting with US President Trump. Trump stated that if all goes well, the US, Russia and Ukraine would hold trilateral talks, which could potentially end the Russia-Ukraine conflict if successful.

(2) Premier Li Qiang chaired the ninth plenary meeting of the State Council on August 18. The meeting noted China's economy had maintained stable growth with new achievements in high-quality development this year.

Spot: (1) Shanghai: On August 18, SMM #1 copper cathode spot premiums against the front-month 2509 contract were quoted at 170-280 yuan/mt, averaging 225 yuan/mt, up 45 yuan/mt MoM. Imported copper arrivals continue, likely pressuring spot premiums which may decline today.

(2) Guangdong: On August 18, Guangdong #1 copper cathode spot premiums against the front-month contract ranged from 10-70 yuan/mt, averaging 40 yuan/mt, up 15 yuan/mt MoM. Post-delivery, suppliers refused to budge on prices but tepid demand caused premiums to jump initially and then pull back.

(3) Imported copper: On August 18, warrant prices were $42-54/mt (QP August), flat MoM; B/L prices at $46-60/mt (QP September), down $2/mt MoM; EQ copper (CIF B/L) at $20-30/mt (QP September), flat MoM, for late-August to mid-September arrivals. Morning session saw active inquiries but limited deals.

(4) Secondary copper: At 11:30 on August 18, futures closed at 78,980 yuan/mt, down 130 yuan/mt from previous session. Spot premiums/discounts averaged 225 yuan/mt, up 45 yuan/mt MoM. Recycled copper raw material prices stayed flat MoM. Guangdong bare bright copper traded at 73,400-73,600 yuan/mt, unchanged. The price difference between copper cathode and copper scrap narrowed to 1,014 yuan/mt, down 85 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod stood at 740 yuan/mt. According to the SMM survey, some enterprises in Jiangxi reported that since September, relevant authorities have explicitly abolished "tax rebates and subsidies." Currently, enterprises are either reducing capacity or fully adopting recycled copper raw materials with invoices for raw material procurement.

(5) Inventory: On August 15, LME copper cathode inventories decreased by 200 mt to 155,600 mt. On August 18, SHFE warrant inventories increased by 938 mt to 25,498 mt.

Prices: On the macro front, no new factors affected copper prices, and subsequent attention should focus on the actual progress of related events. Supply side, concentrated arrivals of imported copper drove inventory growth, with suppliers actively offloading goods ensuring ample imported supply. However, domestic copper cathode supply remained tight, while registered SX-EW copper began entering the market. Demand side, slight recovery signs emerged after late August. Inventory-wise, as of August 18, SMM's mainstream copper inventories nationwide increased by 8,100 mt WoW to 133,700 mt. Overall, with no fresh macro drivers and fundamentals showing looser supply, slightly recovering demand but accumulating inventories, copper prices were expected to face upward pressure today.

[Data Source Statement: Data beyond publicly available information are derived from public sources, market exchanges, and SMM's internal database models, 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.]