IEA Issues Warning on Oil Supply Surplus, LME Copper Plunged Sharply Last Night [SMM Copper Morning Meeting Minutes]

Wednesday, October 15, 2025

Futures: LME copper opened at $10,554/mt overnight. It fluctuated downward at the beginning of the session, touching a low of $10,463/mt, then the center of copper prices rose all the way, approaching a high of $10,620.5/mt near the end of the session, and finally closed at $10,598.5/mt, down 1.88%. Trading volume reached 29,000 lots, and open interest reached 323,000 lots. The most-traded SHFE copper contract 2511 opened at 84,180 yuan/mt overnight, touched a low of 83,890 yuan/mt at the opening, then the center of copper prices fluctuated upward all the way, approaching a high of 84,960 yuan/mt near the end of the session, and finally closed at 84,890 yuan/mt, down 0.96%. Trading volume reached 56,000 lots, and open interest reached 182,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On October 13, Chilean state-owned copper company Codelco issued a new assessment of the losses from the collapse accident at its El Teniente copper mine in July, expecting EBITDA to decrease by approximately $500 million and 2025 production to decrease by 48,000 mt. Although the production disruption has intensified market concerns, Codelco management still emphasized that the full-year copper production target remains generally stable. This accident, intertwined with supply disruptions in sections like Indonesia's Grasberg mine, may further increase the risk of a global concentrate deficit, drawing high attention from the downstream industry chain.

Spot:

(1) Shanghai: On October 14, SMM #1 copper cathode spot prices against the front-month 2510 contract were reported at a discount of 20 yuan/mt to a premium of 120 yuan/mt, with the average price quoted at a premium of 50 yuan/mt, down 30 yuan/mt from the previous trading day; SMM #1 copper cathode prices were 85,780-86,200 yuan/mt. In the morning session, SHFE copper briefly touched a high of 86,650 yuan/mt before starting to fall, then probed a low of 85,650 yuan/mt, and rose slightly to 86,070 yuan/mt near 11:30 am. The inter-month price spread showed a slight contango during the morning trading session, and the import loss for SHFE front-month copper once widened to 3,000 yuan/mt. Looking ahead to today, as the SHFE copper 2510 contract reaches its last trading day, trading activity is expected to be low, but the market's quoted price center for the next month may rise. Considering the widened import loss, smelters might increase export efforts, and the premium center is expected to rise after the contract rollover.

(2) Guangdong: On October 14, Guangdong #1 copper cathode spot prices against the front-month contract were at a discount of 10 yuan/mt to a premium of 50 yuan/mt, with the average premium at 20 yuan/mt, up 10 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 70 yuan/mt to a discount of 50 yuan/mt, with the average discount at 60 yuan/mt, up 10 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 86,160 yuan/mt, up 1,255 yuan/mt from the previous trading day, and the average price of SX-EW copper was 86,080 yuan/mt, up 1,255 yuan/mt from the previous trading day. Overall, copper prices surged, dampening downstream restocking interest, but suppliers refused to budge on prices ahead of the delivery date, leading to sluggish overall trading.

(3) Imported copper: On October 14, warrant prices were $40-50/mt, QP October, with the average price down $4/mt from the previous trading day; B/L prices were $40-64/mt, QP November, with the average price down $1/mt from the previous trading day; EQ copper (CIF B/L) was $12-20/mt, QP November, with the average price down $5/mt from the previous trading day. Quotations referred to cargoes arriving in mid-to-late October.

(4) Secondary copper: At 11:30 on October 14, the futures closing price was 86,070 yuan/mt, up 1,420 yuan/mt from the previous trading day; the average spot premium/discount was 50 yuan/mt, down 30 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials rose 1,000 yuan/mt MoM. The price of bare bright copper in Guangdong was 77,500-77,700 yuan/mt, up 1,000 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 3,567 yuan/mt, up 326 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,935 yuan/mt. According to the SMM survey, copper prices fluctuated significantly, and market procurement sentiment was average, with many secondary copper rod enterprises reporting flat orders.

(5) Inventory: On October 13, LME copper cathode inventories decreased by 550 mt to 138,800 mt; on October 14, SHFE warrant inventories increased by 3,405 mt to 36,295 mt.

Prices: On the macro front, Powell noted that liquidity in the money market had tightened and downside risks in the labor market had rebounded, strengthening market expectations for interest rate cuts. According to the US Fed Watch, the probability of a cumulative 50-basis-point rate cut by December increased to over 90%. The US dollar index fell, providing support for copper prices. Additionally, the IEA issued a warning about a severe global crude oil supply surplus, and international crude oil prices resumed their decline, exerting downward pressure on copper prices. On the fundamentals side, supply of non-registered cargoes decreased, and with the approaching delivery date, market supply circulation tightened. Demand side, wait-and-see sentiment remained strong, and procurement interest stayed weak. Overall, supported by macro tailwinds and supply tightening, copper prices were expected to find support at lower levels today.

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