Expectations for US Fed interest rate cuts heat up, LME copper surges overnight [SMM Copper Morning Meeting Minutes]

Tuesday, October 14, 2025

Futures: LME copper opened at $10,648.5/mt overnight. After hitting a low of $10,621.5/mt at the beginning of the session, it fluctuated upward throughout, approaching a high of $10,864.5/mt near the session's end, and finally closed at $10,802/mt, a gain of 4.13%. Trading volume reached 29,000 lots, and open interest reached 323,000 lots. The most-traded SHFE copper 2511 contract opened at 85,800 yuan/mt overnight. It hit a low of 85,580 yuan/mt at the opening, after which the center of copper prices maintained high levels and fluctuated rangebound within a narrow range. Approaching a high of 86,790 yuan/mt near the session's end, it finally closed at 86,520 yuan/mt, a gain of 2.02%. Trading volume reached 85,000 lots, and open interest reached 200,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On October 10, Chilean mining company Antofagasta conducted the first blast at the Encuentro sulphide pit under its Centinela project, marking the start of preliminary stripping work. This blast will provide high-grade sulphide ore for the second beneficiation plant under construction, supplementing the ore supply from the existing Esperanza South pit. The expansion project was approved in July 2025, with an estimated investment of $1 billion. The stripping phase is expected to be completed in 2028. The Encuentro deposit was included in the year-end 2024 reserves, with reserves of approximately 738 million mt, averaging a grade of 0.45% Cu, accompanied by 0.17 g/t Au and 0.015% Mo, which is superior to the existing Centinela grade of 0.41%. Antofagasta aims to increase total copper production by approximately 30% in the medium term through this expansion.

Spot:

(1) Shanghai: On October 13, 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 170 yuan/mt, with the average price quoted at a premium of 80 yuan/mt, up 60 yuan/mt from the previous trading day. The SMM #1 copper cathode price ranged from 84,800 to 85,290 yuan/mt. At the beginning of the morning session, SHFE copper futures briefly rose to 85,200 yuan/mt before starting to pull back to around 84,600 yuan/mt. The inter-month price spread was almost flat, and the import loss for the front-month SHFE copper contract was around 800 yuan/mt. Looking ahead to today, although copper prices pulled back slightly, they remain at relatively high levels. Spot trading is expected to see limited significant improvement, and activity is likely to decrease as the delivery date approaches.

(2) Guangdong: On October 13, Guangdong #1 copper cathode spot prices against the front-month contract were at a discount of 20 yuan/mt to a premium of 40 yuan/mt, with the average premium at 10 yuan/mt, down 20 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 80 yuan/mt to a discount of 60 yuan/mt, with the average discount at 70 yuan/mt, down 10 yuan/mt from the previous trading day. The average price for Guangdong #1 copper cathode was 84,905 yuan/mt, down 1,630 yuan/mt from the previous trading day. The average price for SX-EW copper was 84,825 yuan/mt, down 1,620 yuan/mt from the previous trading day. Overall, copper prices pulled back, and suppliers' enthusiasm for restocking increased, with trading sentiment improving.

(3) Imported copper: On October 13, warrant prices were $45-53/mt, QP October, with the average price flat from the previous trading day; B/L prices were $45-61/mt, QP November, with the average price flat from the previous trading day; EQ copper (CIF B/L) was $17-25/mt, QP November, with the average price flat from the previous trading day. Quotations referred to cargoes arriving in mid-to-late October.

(4) Secondary copper: At 11:30 on October 13, the futures closing price was 84,650 yuan/mt, down 1,600 yuan/mt from the previous trading day; the spot premiums/discounts averaged 80 yuan/mt, up 60 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials fell 1,200 yuan/mt MoM. The price of bare bright copper in Guangdong was 76,500-76,700 yuan/mt, down 1,200 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 3,241 yuan/mt, down MoM. The price difference between copper cathode rod and secondary copper rod was 1,640 yuan/mt. According to the SMM survey, the price difference between copper cathode and copper scrap narrowed due to the pullback in copper prices, but the supply of recycled copper raw materials did not decrease significantly due to the price decline. The reason is that some areas in Jiangxi received clear government notices that incentive subsidies in related investment promotion would be canceled, leading to a noticeable decline in demand for copper scrap without invoices. Therefore, the price retreat had little impact on the supply of recycled copper raw materials.

(5) Inventory: On October 10, LME copper cathode inventory decreased by 50 mt to 139,350 mt; on October 13, SHFE warrant inventory increased by 2,926 mt to 32,890 mt.

Prices: On the macro front, after China implemented a series of trade countermeasures, Trump's rhetoric shifted from before, releasing signals of willingness to reach an agreement with China to ease tensions, which to some extent alleviated market risk-off sentiment and benefited copper prices. In addition, Philadelphia Fed's Paulsen supported two more interest rate cuts this year, each by 25 basis points, boosting expectations for US Fed interest rate cuts. On the fundamentals, supply side, imported cargoes continued to arrive normally, while domestic cargo arrivals decreased, leading to an overall supply tightening; demand side, enterprises gradually resumed operations after the holiday, and demand rebounded, but copper prices remained high, still suppressing downstream purchasing sentiment. As of October 13, SMM spot copper inventory in mainstream regions increased by 5,700 mt WoW to 172,000 mt. Overall, with mixed macro factors and the fundamental pattern of supply tightening and demand recovery, copper prices are expected to continue fluctuating rangebound at high levels 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 as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]