Saudi Aramco Expands into Metal Trading, LME Copper Edged Down Slightly Overnight [SMM Copper Morning Meeting Minutes]

Thursday, October 16, 2025

Futures: LME copper opened at $10,681/mt overnight, touched a high of $10,715/mt in early trading, then the price center declined all the way and touched a low of $10,532.5/mt near the end of the session, finally closing at $10,576/mt, down 0.21%, with trading volume reaching 16,000 lots and open interest at 320,000 lots. The most-traded SHFE copper 2511 contract opened at 85,240 yuan/mt overnight, touched a low of 84,960 yuan/mt after opening, then reached a high of 85,400 yuan/mt, showed a "W" pattern in early trading and then maintained a sideways trend, finally closing at 85,160 yuan/mt, up 0.24%, with trading volume reaching 35,000 lots and open interest at 170,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On October 14, according to Bloomberg, the trading division of Saudi Aramco is planning to hire copper traders, marking a significant step for the global energy giant to accelerate its entry into the metal trading market. This move is seen as an important step in Aramco's diversification strategy against the backdrop of energy transition, aiming to expand its influence in the commodity sector. Industry insiders pointed out that as energy companies increasingly enter metal trading, the global competitive landscape for copper, a key energy transition metal, may further intensify.

Spot:

(1) Shanghai: On October 15, SMM #1 copper cathode spot prices against the front-month 2510 contract were reported at parity to a premium of 180 yuan/mt, with the average price quoted at a premium of 90 yuan/mt, up 40 yuan/mt from the previous trading day; SMM #1 copper cathode prices ranged from 84,950 to 85,520 yuan/mt. In the morning, the SHFE copper 2510 contract mainly fluctuated between 84,920 and 85,390 yuan/mt, while the SHFE copper 2511 contract fluctuated between 84,950 and 85,420 yuan/mt. SMM consistently quoted against the front-month contract, with the inter-month price spread fluctuating between Contango 80 and backwardation 10 yuan/mt during the trading session. Looking ahead today, officially entering the SHFE copper 2511 contract, the number of futures warrants in the Shanghai region was 6,277 mt, and holders are expected to show reluctance to budge on prices.

(2) Guangdong: On October 15, Guangdong #1 copper cathode spot prices against the front-month contract were at a premium of 10 yuan/mt to 70 yuan/mt, with the average premium at 40 yuan/mt, up 20 yuan/mt from the previous trading day; SX-EW copper was reported at a discount of 50 yuan/mt to 30 yuan/mt, with the average discount at 40 yuan/mt, up 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 85,215 yuan/mt, down 945 yuan/mt from the previous trading day, while the average price of SX-EW copper was 85,135 yuan/mt, down 945 yuan/mt from the previous trading day. Overall, spot trades were quiet on the delivery day, with attention on whether inventory can decline again after delivery.

(3) Imported copper: On October 15, warrant prices were $40 to 50/mt, QP October, with the average price down $4/mt from the previous trading day; B/L prices were $40 to 64/mt, QP November, with the average price down $1/mt from the previous trading day; EQ copper (CIF B/L) was $12/mt to 20/mt, QP November, with the average price down $5/mt from the previous trading day, quotations refer to cargoes arriving in mid-to-late October.

(4) Secondary Copper: At 11:30 on October 15, the futures closing price was 85,080 yuan/mt, down 990 yuan/mt from the previous trading day. The average spot premium was 90 yuan/mt, up 40 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials fell by 500 yuan/mt MoM. The price of bare bright copper in Guangdong was 77,000-77,200 yuan/mt, down 5,000 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 3,149 yuan/mt, down 418 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,690 yuan/mt. According to the SMM survey, as copper prices fluctuated sharply, both end-use consumption enterprises and secondary copper rod enterprises turned to a wait-and-see stance. Secondary copper rod enterprises reported that when copper prices fell sharply, they chose to purchase copper cathode and sell it in the market after prices rebounded to earn the price difference. Therefore, in the last three trading days, secondary copper rod enterprises purchased very little recycled copper raw materials. They will resume purchasing recycled copper raw materials after copper prices stabilize.

(5) Inventory: On October 14, LME copper cathode inventory decreased by 450 mt to 138,350 mt; on October 15, SHFE warrant inventory increased by 8,236 mt to 44,531 mt.

Price: On the macro front, the US Fed Beige Book indicated a slight decline in US consumer spending and generally sluggish labour market conditions. Meanwhile, US Fed Governor Milan called for accelerating the pace of interest rate cuts, supporting two more rate cuts within the year, jointly fueling market expectations for US Fed interest rate cuts. The US dollar index fell below the 99 mark, providing support for copper prices. On the fundamentals side, the supply of spot cargo in the market continued to tighten, while downstream purchase willingness remained weak, presenting a weak supply-demand dynamic. Overall, under the combined effect of macro tailwinds and tightening fundamentals, copper prices are expected to maintain 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.]