U.S. Tariffs Disrupt Market Expectations Again, Copper Prices Fluctuate Significantly Amid Mixed Sentiments [SMM Macro Weekly Review]

Copper prices overall fell before rising this week. Trump threatened to impose 100% tariffs on Chinese goods, escalating Sino-US trade friction and triggering risk-off sentiment, which led to a sharp decline in copper prices. Subsequently, China quickly introduced countermeasures and signaled willingness to negotiate, while Trump expressed readiness to reach a deal with China, stabilizing market sentiment. Easing macro risks drove a strong rebound in copper prices. Several US Fed officials voiced support for further interest rate cuts within the year, emphasizing the need to accelerate the pace of easing. Rising employment and liquidity pressures increased market expectations for a cumulative 50-basis-point rate cut in December, causing the US dollar index to fall below the 99 mark, thereby supporting higher copper prices.

On the fundamentals side, several mines and smelters made market statements this week, expressing concerns about the difficult situation in the copper concentrate market and the imbalance in copper concentrate supply-demand balance for 2026. Long-term contract negotiations are expected to be exceptionally challenging. The spot market remained sluggish during this week's LME Week meetings. Spot trading of copper concentrates was inactive. Arrivals of imported copper were flat compared to last week, and inter-trader transactions were also subdued. Supply of imported material remained stable, while domestic supply was relatively tight. Combined with the approaching delivery period, market liquidity contracted. However, high prices suppressed downstream demand, consumption recovery was limited, and inventory continued a slight rebound.

Looking ahead to next week, liquidity conditions are expected to keep copper prices at elevated levels. LME copper is forecast to fluctuate between $10,500-10,850/mt, while SHFE copper is expected to range between 84,500-86,500 yuan/mt. On the spot side, domestic demand is expected to remain stable, and spot premiums are also likely to hold steady. Spot prices against the SHFE copper 2510 contract are anticipated to range from a discount of 40 yuan/mt to a premium of 140 yuan/mt.