US Fed Signals Further Interest Rate Cuts, Overnight LME Copper Fluctuates and Closes Lower [SMM Copper Morning Meeting Minutes]

Wednesday, September 24, 2025
Futures: Overnight, LME copper opened at $9,976/mt, fluctuated considerably after opening and touched a low of $9,966/mt, then the center of copper prices rose to a high of $9,998/mt before showing a "W" pattern, and finally closed at $9,990/mt, down 0.08%, with trading volume reaching 11,000 lots and open interest reaching 289,000 lots. Overnight, the most-traded SHFE copper 2511 contract opened at 79,980 yuan/mt, touched a high of 80,100 yuan/mt at the beginning of the session, then the center moved down to a low of 79,860 yuan/mt, fluctuated upward to a high afterward, and finally moved sideways to close at 79,970 yuan/mt, up 0.04%, with trading volume reaching 20,000 lots and open interest reaching 174,000 lots.
[SMM Copper Morning Meeting Minutes] News:
(1) On September 17, Canada's Atico Mining signed an investment protection agreement (IPA) with the Ecuadorian government, covering an investment of approximately $158 million, enjoying a 5% income tax reduction, and allowing for international arbitration in case of disputes. The agreement ensures legal protection for project assets. The La Plata project is in the final stage of environmental and mining permits. According to the 2024 feasibility study, the mine has reserves of 2.51 million mt with an average copper grade of 1.59% and zinc grade of 2.18%, and is expected to produce 9.71 million pounds of copper and 13.25 million pounds of zinc annually, with a mine life of over 8 years.
Spot:
(1) Shanghai: On September 23, SMM #1 copper cathode spot prices against the front-month 2510 contract were reported at a discount of 10 yuan/mt to a premium of 120 yuan/mt, with the average price quoted at a premium of 55 yuan/mt, down 5 yuan/mt from the previous trading day; SMM #1 copper cathode prices were 79,860-80,160 yuan/mt. In the morning session, SHFE copper briefly surged to 80,160 yuan/mt before starting to decline, fell to 79,860 yuan/mt by the end of the first section, then moved back to the range of 79,920-79,960 yuan/mt, and closed at 79,940 yuan/mt. The inter-month price spread was at BACK10-BACK30 yuan/mt; the import profit margin for SHFE copper front-month contract narrowed to a loss of 500 yuan/mt. Looking ahead, copper prices are expected to continue fluctuating around 80,000 yuan/mt, downstream stockpiling for the National Day holiday is relatively slow, and spot premiums are expected to continue hovering around parity.
(2) Guangdong: On September 23, Guangdong #1 copper cathode spot prices against the front-month contract were reported at a discount of 40 yuan/mt to a premium of 100 yuan/mt, with the average premium at 70 yuan/mt, flat from the previous trading day; SX-EW copper was reported at a discount of 40 yuan/mt to a discount of 20 yuan/mt, with the average discount at 30 yuan/mt, flat from the previous trading day. The average price of Guangdong #1 copper cathode was 80,030 yuan/mt, down 235 yuan/mt from the previous trading day, and the average price of SX-EW copper was 79,930 yuan/mt, down 235 yuan/mt from the previous trading day. Overall, downstream moderately increased procurement volume due to the approaching typhoon, and overall trading was moderate.
(3) Imported copper: On September 23, warrant prices were $52-64/mt, QP October, with the average price up $1/mt from the previous trading day; B/L prices were $53-65/mt, QP October, with the average price flat from the previous trading day; EQ copper (CIF B/L) was $28-36/mt, QP October, with the average price flat from the previous trading day. Quotations refer to cargoes arriving in the first half of October.
(4) Secondary copper: At 11:30 on September 23, the futures closing price was 79,940 yuan/mt, down 170 yuan/mt from the previous trading day; the average spot premiums/discounts were 55 yuan/mt, down 5 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials fell 100 yuan/mt MoM. The price of bare bright copper in Guangdong was 73,400-73,600 yuan/mt, down 100 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 1,799 yuan/mt, down 73 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 825 yuan/mt. According to an SMM survey, due to the impact of Typhoon "Hagibis", most secondary copper raw material yards in Guangdong will stop purchasing and shipping tomorrow, with the specific resumption date pending notification from enterprises.
(5) Inventory: On September 22, LME copper cathode inventories decreased by 400 mt to 144,975 mt; on September 23, SHFE warrant inventories decreased by 2,166 mt to 27,727 mt.
Prices: On the macro front, Powell stated that current interest rates remain relatively tight, while several US Fed officials anticipated further interest rate cuts in the future, increasing market optimism about additional rate cut room. The US dollar index fluctuated and fell, providing support for copper prices. Additionally, negotiations to resume Iraq's crude oil exports faced obstacles, slightly alleviating concerns about a crude oil supply surplus. International crude oil rebounded, providing slight support for copper prices. On the fundamentals side, as the National Day holiday approaches, downstream stockpiling sentiment warmed slightly, but copper prices still fluctuated around 80,000 yuan/mt. High prices constrained enterprises' restocking willingness, leading to slow stockpiling actions. Overall, with macro front support and no significant increase in fundamental demand, copper prices are expected to maintain a fluctuating trend rangebound today.

[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this to replace independent judgment. Any decisions made by clients are unrelated to SMM.]