MMG's Copper Loss Amounts to 90,000 mt; LME Copper Fluctuated and Closed Higher Overnight [SMM Copper Morning Meeting Minutes]

Tuesday, October 21, 2025

Futures: LME copper opened at $10,629.5/mt overnight, fluctuated downward initially to touch a low of $10,601/mt, then the center of copper prices gradually moved upward to touch a high of $10,714/mt, subsequently fluctuated considerably and finally closed at $10,712.5/mt, up 0.99%, with trading volume reaching 16,000 lots and open interest reaching 293,000 lots. The most-traded SHFE copper 2512 contract opened and touched a low of 85,220 yuan/mt overnight, then fluctuated upward to touch a high of 85,790 yuan/mt, subsequently fluctuated considerably and finally closed at 85,670 yuan/mt, up 0.48%, with trading volume reaching 46,000 lots and open interest reaching 229,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On October 17, Chinese mining company MMG Ltd. recently raised its estimate of copper losses due to "illegal mining" within its Las Bambas mine in Peru to approximately 90,000 mt, covering cumulative extraction over the past 15 years. Although this figure represents only a small portion of Las Bambas' total resources, it occurred in a key development area for the company's planned third open-pit mining area, Sulfobamba. This area is currently occupied by the local Pamputa community engaging in "artisanal mining," posing potential challenges to MMG's development pace and benefit distribution.

Spot:

(1) Shanghai: On October 20, SMM #1 copper cathode spot prices against the front-month 2511 contract were reported at a premium of 10-110 yuan/mt, with the average price quoted at a premium of 60 yuan/mt, up 5 yuan/mt from the previous trading day; SMM #1 copper cathode prices ranged from 85,270 to 85,990 yuan/mt. In the morning session, SHFE copper rose from 85,000 yuan/mt to 85,460 yuan/mt, and surged to 85,900 yuan/mt during the second trading session; the inter-month price spread showed Contango 30-Contango 10 yuan/mt, and the import loss for SHFE front-month copper narrowed to around 800 yuan/mt. Looking ahead to today, with copper prices remaining high, downstream buyers are expected to mainly make just-in-time procurement. Given the replenishment of imported and domestic supplies, premiums are unlikely to rise significantly, and spot trades are expected to continue around small premiums.

(2) Guangdong: On October 20, Guangdong #1 copper cathode spot prices against the front-month contract were at a premium of 30-100 yuan/mt, with the average premium at 65 yuan/mt, down 65 yuan/mt from the previous trading day; SX-EW copper was reported at a discount of 30-10 yuan/mt, with the average discount at 20 yuan/mt, flat from the previous trading day. The average price of Guangdong #1 copper cathode was 85,590 yuan/mt, up 735 yuan/mt from the previous trading day, while the average price of SX-EW copper was 85,505 yuan/mt, down 800 yuan/mt from the previous trading day. Overall, the significant rise in copper prices led to a noticeable decline in downstream procurement sentiment, and spot trades were sluggish.

(3) Imported copper: On October 20, warrant prices were $30-40/mt, QP November, with the average price down $1/mt from the previous trading day; B/L prices were $40-60/mt, QP November, with the average price flat from the previous trading day; EQ copper (CIF B/L) was $4-16/mt, QP November, with the average price down $2/mt from the previous trading day. Quotations refer to cargoes arriving in late October.

(4) Secondary Copper: At 11:30 on October 20, 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 trading day. Today, the price of recycled copper raw materials fell 200 yuan/mt WoW. 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 WoW. 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, nearly 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. Therefore, the vast majority of recycled copper raw material traders were unwilling to make overseas purchases starting from October, and traders expect the certificate of origin inspection procedures to continue at least until the end of the year.

(5) Inventory: On October 17, LME copper cathode inventories decreased by 50 mt to 137,175 mt. On October 20, SHFE warrant inventories decreased by 1,530 mt to 41,319 mt.

Price: On the macro front, Hamas discussed a Gaza ceasefire agreement in Egypt, involving disarmament issues. Meanwhile, White House official Hassett stated that the government shutdown is expected to end soon, which alleviated market uncertainty and provided support for copper prices. On the fundamentals, supply side showed a loose trend with concentrated arrivals of imported and domestic cargo. Demand side remained weak, with strong wait-and-see sentiment and insufficient purchase willingness among downstream players. In terms of inventory, as of Monday, October 20, SMM copper inventories in mainstream areas across China increased by 9,100 mt WoW to 186,600 mt. Overall, although weak fundamentals limited the upside room, recovering macro sentiment provided a floor for prices. Copper prices are expected to have some support at the bottom 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.]