Copper Supply Chain Releases Multiple Signals of Tightness, LME Copper Surged Sharply Overnight [SMM Copper Morning Meeting Minutes]

Thursday, September 25, 2025
Futures: Overnight, LME copper opened at $9,957.5/mt, touched a low of $9,927.5/mt at the opening, then surged straight up. Copper prices continued to rise, approaching a high of $10,364/mt near the close, and finally settled at $10,320/mt, up 3.27%, with trading volume reaching 47,000 lots and open interest at 290,000 lots. Overnight, the most-traded SHFE copper 2511 contract opened higher with a gap at 81,000 yuan/mt, touched a low of 80,750 yuan/mt early in the session, then climbed to a high of 82,920 yuan/mt, and subsequently fluctuated rangebound at high levels before finally settling at 82,610 yuan/mt, up 3.28%, with trading volume at 214,000 lots and open interest at 218,000 lots.
[SMM Copper Morning Conference Summary] News:
(1) Since September 8, a mine leak occurred at Grasberg, resulting in two deaths and five missing persons. The incident led to a two-week shutdown of the world's second-largest copper mine, and the market began pricing in its broader impact. Freeport Indonesia's 2026 production may be 35% lower than previous estimates (previously estimated at 1.7 billion pounds of copper and 1.6 million ounces of gold).
(2) On September 24, Canadian mining company Hudbay Minerals announced that due to unrest caused by protests in Lima, the capital of Peru, and multiple regions across the country, its Constancia mill in southern Peru has been temporarily suspended, and non-essential personnel have been evacuated. The company emphasized that the suspension is for safety reasons and stated it is continuously assessing the local situation to ensure the safety of employees and assets. The mine is one of Hudbay's key copper operations in Peru, and the shutdown has raised concerns about supply chains.
Spot:
(1) Shanghai: On September 24, 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 premium at 55 yuan/mt, unchanged from the previous trading day; SMM #1 copper cathode prices ranged from 79,930 to 80,160 yuan/mt. In early trading, SHFE copper fluctuated between 79,940 and 79,990 yuan/mt, rising to 80,030 yuan/mt near 11 a.m. During the morning session, the inter-month price spread was basically flat, with the front-month import loss around 450 yuan/mt. Copper prices stabilized around 80,000 yuan/mt, downstream stocking sentiment was weak, and based on Shanghai spot copper trading sentiment in the first half of the week, this year's National Day stockpiling was weaker compared to the same period last year. Spot trading tomorrow is expected to continue around parity.
(2) Guangdong: On September 24, Guangdong #1 copper cathode spot prices against the front-month contract were 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 40-20 yuan/mt, with the average discount at 30 yuan/mt, flat from the previous trading day. The average price for Guangdong #1 copper cathode was 80,030 yuan/mt, unchanged from the previous day, and the average price for SX-EW copper was 79,930 yuan/mt, flat from the previous day. Overall, market activity was sluggish due to the typhoon, and spot premiums were unchanged from yesterday.
(3) Imported copper: On September 24, the warrant price was $52-62/mt, QP October, with the average price down $1/mt from the previous trading day; B/L price was $53-65/mt, QP October, with the average price unchanged from the previous trading day. EQ copper (CIF B/L) was priced at $30-38/mt, QP October, with the average price up $1/mt from the previous trading day. The quotations referred to shipments arriving in late September and early October.
(4) Secondary copper: On September 24 at 11:30, the futures closing price was 80,020 yuan/mt, up 80 yuan/mt from the previous trading day. The spot premiums/discounts averaged 55 yuan/mt, unchanged from the previous trading day. The price of recycled copper raw materials remained unchanged MoM. In Guangdong, the price of bare bright copper was 73,400-73,600 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 1,879 yuan/mt, up 80 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 850 yuan/mt. According to the SMM survey, copper prices moved rangebound during the day. With no significant change in the price difference between copper cathode rod and secondary copper rod, the procurement sentiment of wire and cable enterprises was moderate. Secondary copper rod enterprises mainly focused on stockpiling before the holiday, but actual shipments were relatively small.
(5) Inventory: On September 23, LME copper cathode inventory decreased by 200 mt to 144,775 mt. On September 24, SHFE warrant inventory decreased by 308 mt to 27,419 mt.
Price: On the macro front, since the mine leakage incident at the world's second-largest copper mine, Grasberg, in Indonesia on September 8, Grasberg has been fully shut down for nearly two weeks, causing a significant contraction in global copper supply. The market began to trade its larger impact. Freeport Indonesia estimated that the sales volume of copper and gold in 25Q4 would be negligible and stated that 26-year copper production might be about 35% lower than the pre-incident estimate (the previous estimate for 26 was approximately 1.7 billion pounds of copper and 1.6 million ounces of gold). This event will lead to a phased reduction in global copper ore supply, causing severe market concerns. Night session copper prices surged, reaching a new high for the year. Fundamentally, in terms of supply, traders' enthusiasm for shipping remained low. In terms of consumption, downstream did not show a clear willingness to stockpile, mostly maintaining just-in-time procurement. Overall, against the backdrop of already tight global copper supply, this unexpected event completely ignited market concerns over supply deficits, supporting copper prices. It is expected that today's copper prices will fluctuate rangebound at a high level.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and not rely solely on this information. Any decision made by the client is unrelated to SMM.]