Codelco Plans to Raise Copper Premiums in Europe, LME Copper Fluctuated and Closed Lower Last Friday [SMM Copper Morning Meeting Minutes]

Monday, October 20, 2025

Futures: LME copper opened at $10,483.5/mt last Friday night, dipped to $10,471.5/mt at the beginning of the session, then fluctuated upward to a high of $10,650/mt, fluctuated considerably afterwards, and finally closed at $10,607/mt, down 0.12%. Trading volume reached 25,000 lots, and open interest reached 322,000 lots. The most-traded SHFE copper contract 2512 opened at 84,660 yuan/mt last Friday night, rose to a high of 85,230 yuan/mt at the beginning of the session, then fluctuated downward to a low of 84,410 yuan/mt. Subsequently, the center of copper prices gradually moved upward, and it finally closed at 84,890 yuan/mt, up 0.15%. Trading volume reached 64,000 lots, and open interest reached 216,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On October 17, according to a Reuters report cited by Mining, Chile's state-owned copper giant Codelco plans to increase the copper surcharge for the European market to $345/mt in 2026, hitting a record high. This decision reflects the market reality of persistently tight global copper supply, intensified competition for smelting capacity, and rising energy costs. According to industry sources, the increase of about 39% has become a focal point in Codelco's annual long-term contract negotiations with European customers. The company has not yet issued an official comment on the news.

Spot:

(1) Shanghai: On October 17, SMM #1 copper cathode spot prices against the front-month 2511 contract were quoted at parity to a premium of 110 yuan/mt, with the average price quoted at a premium of 55 yuan/mt, down 5 yuan/mt from the previous trading day. SMM #1 copper cathode prices were 84,640-84,910 yuan/mt. In the morning session, SHFE copper fell from 85,070 yuan/mt, touching a low of 84,620 yuan/mt around 10 a.m. The inter-month price spread fluctuated in the range of C30-C10, and the import loss for the front-month SHFE copper contract narrowed to around 800 yuan/mt. Looking ahead to this week, warrant outflows and imported arrivals put pressure on the market to sell. The pullback in copper prices provided downstream procurement opportunities. Trading sentiment is expected to improve relatively next week.

(2) Guangdong: On October 17, Guangdong #1 copper cathode spot prices against the front-month contract were at a premium of 30-230 yuan/mt, with the average premium at 130 yuan/mt, up 80 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 30-10 yuan/mt, with the average discount at 20 yuan/mt, up 10 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 84,855 yuan/mt, down 260 yuan/mt from the previous trading day. The average price of SX-EW copper was 84,705 yuan/mt, down 330 yuan/mt from the previous trading day. Overall, the pullback in copper prices led to an increase in downstream procurement volume. Spot trades improved, and premiums rose.

(3) Imported copper: On October 17, warrant prices were $30-44/mt, QP October, with the average price down $8/mt from the previous trading day. B/L prices were $40-60/mt, QP November, with the average price down $2/mt from the previous trading day. EQ copper (CIF B/L) was $6-18/mt, QP November, with the average price down $4/mt from the previous trading day. Quotations referred to cargoes arriving in mid-to-late October.

(4) Secondary Copper: At 11:30 on October 17, the futures closing price was 84,630 yuan/mt, down 540 yuan/mt from the previous trading day. The average spot premium/discount was 55 yuan/mt, down 5 yuan/mt from the previous day. Today, the price of recycled copper raw materials fell 200 yuan/mt MoM. The price of bare bright copper in Guangdong was 77,000-77,200 yuan/mt, down 200 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 2,664 yuan/mt, down 332 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,500 yuan/mt. According to an SMM survey, some traders engaged in recycled metal imports indicated that the probability of imported containers being spot-checked for certificates of origin has increased significantly recently, leading to a 15-30 day extension in customs clearance time compared to the past. As a result, over 1,000 scrap metal containers were stranded at Ningbo port, and an estimated 100-200 containers of recycled copper raw materials were also stranded at ports in Guangdong. Consequently, the vast majority of recycled copper raw material traders have been reluctant to make overseas purchases since October, and traders expect the certificate of origin inspection procedures to continue at least until the end of the year.

(5) Inventory: On October 16, LME copper cathode inventories decreased by 225 mt to 137,225 mt; on October 17, SHFE warrant inventories decreased by 1,557 mt to 42,849 mt.

Price: On the macro front, US Fed official Musalem stated that if employment risks rise and inflation remains controllable, he might support further interest rate cuts, providing support for copper prices. However, Trump's release of mild signals on trade issues pushed the US dollar index to close higher, putting pressure on copper prices. Meanwhile, US and Chinese trade representatives met again over the weekend, improving market sentiment. On the fundamentals, supply side, high-quality copper remained tight, while arrivals of standard and non-registered spot cargo were concentrated, leading to a looser market supply. Demand side, the foundation of rigid demand persisted, but high copper prices significantly suppressed purchase willingness, and wait-and-see sentiment was strong in the market. Overall, with bullish and bearish factors balancing each other, copper prices were expected to fluctuate rangebound 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.]