Intensifying US-China trade conflict hit LME copper last Friday [SMM Copper Morning Meeting Minutes]

Monday, October 13, 2025

Futures: On Friday night, LME copper opened at $10,787.5/mt, initially moved sideways and touched a high of $10,861/mt, then the price center dropped sharply to a low of $10,326/mt, and finally closed at $10,374/mt, down 3.73%, with trading volume at 41,000 lots and open interest at 322,000 lots. On Friday night, the most-traded SHFE copper 2511 contract opened at 86,600 yuan/mt, initially touched a high of 86,770 yuan/mt, then the price center moved lower all the way to a low of 82,700 yuan/mt, and finally closed at 83,030 yuan/mt, down 4.46%, with trading volume at 176,000 lots and open interest at 207,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On October 9, Chilean state-owned mining company Codelco released data showing that, affected by the collapse accident at the El Teniente mine at the end of July, the company's copper production in August fell sharply by 25% to only 93,400 mt. The accident caused six deaths and severely impacted mine operations. Codelco stated that it is evaluating the production resumption plan, but the overall supply may continue to be affected in the short term. The market reacted strongly, with copper price volatility intensifying.

Spot:

(1) Shanghai: On October 10, SMM #1 copper cathode spot prices against the front-month 2510 contract were reported at a discount of 60 yuan/mt to a premium of 100 yuan/mt, with the average price at a premium of 20 yuan/mt, up 5 yuan/mt from the previous trading day; SMM #1 copper cathode prices were 86,380-86,980 yuan/mt. In early morning trading, SHFE copper gradually fell from 86,700 yuan/mt, briefly touched 86,360 yuan/mt, then rebounded to 86,940 yuan/mt, and gave back some gains after approaching 11 a.m., closing the morning session at 86,230 yuan/mt. During the morning trading session, the inter-month price spread for SHFE copper fluctuated frequently, moving between Contango 60 yuan/mt and Back 20 yuan/mt. Looking ahead this week, with copper prices remaining high, downstream buyers mainly made just-in-time procurement. Approaching delivery and being in a Contango structure, spot discounts for SHFE copper are expected to be limited.

(2) Guangdong: On October 10, Guangdong #1 copper cathode spot prices against the front-month contract were reported at parity to a premium of 60 yuan/mt, with the average premium at 30 yuan/mt, flat from the previous trading day; SX-EW copper was reported at a discount of 70 yuan/mt to a discount of 50 yuan/mt, with the average discount at 60 yuan/mt, flat from the previous trading day. The average price for Guangdong #1 copper cathode was 86,535 yuan/mt, up 835 yuan/mt from the previous trading day; the average price for SX-EW copper was 86,445 yuan/mt, up 835 yuan/mt from the previous trading day. Overall, copper prices remained strong, downstream consumption was weak, but suppliers were reluctant to lower prices approaching delivery, resulting in sluggish spot trades.

(3) Imported copper: On October 10, warrant prices were $45-53/mt, QP October, average price flat from the previous trading day; B/L prices were $45-61/mt, QP November, average price flat from the previous trading day; EQ copper (CIF B/L) was $17-25/mt, QP November, average price down $5/mt from the previous trading day, offers referred to cargoes arriving in mid-to-late October.

(4) Secondary Copper: At 11:30 on October 10, the futures closing price was 86,250 yuan/mt, unchanged from the previous trading day. The average spot premium/discount was 20 yuan/mt, up 5 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials remained unchanged MoM. The price of bare bright copper in Guangdong was 77,700-77,900 yuan/mt, flat from the previous trading day. The price difference between copper cathode and copper scrap was 3,504 yuan/mt, up 5 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,990 yuan/mt. According to an SMM survey, some secondary copper rod enterprises indicated that as the tax payment deadline approaches, local governments have explicitly stated that after paying taxes in September, scrap utilization enterprises will no longer enjoy relevant subsidies. Therefore, scrap utilization enterprises remain cautious. If the policy is completely terminated, enterprises will seek relocation opportunities.

(5) Inventories: On October 9, LME copper cathode inventories decreased by 75 mt to 139,400 mt. On October 10, SHFE warrant inventories increased by 261 mt to 29,964 mt.

Prices: On the macro front, Trump threatened to impose 100% tariffs on Chinese goods, escalating China-US tariff conflicts and triggering market risk aversion, putting copper prices under pressure. Additionally, the US Bureau of Labor Statistics will release the September CPI report at 20:30 Beijing time on October 24, alleviating uncertainty in the US market. On the fundamentals side, supply side, imported and domestic supplies remained relatively stable, and spot supply in the market was generally ample. Demand side, high copper prices suppressed downstream procurement sentiment, and just-in-time procurement continued to dominate. Overall, due to macro market concerns and weak demand, copper prices are expected to have limited upside 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 it as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]