Russia-Ukraine Peace Plan Progresses Step by Step, LME Copper Plunged Overnight [SMM Copper Morning Meeting Minutes]

Wednesday, October 22, 2025

Futures: LME copper opened at $10,639.5/mt overnight, fluctuated upward initially and touched a high of $10,658.5/mt, then the center of copper prices gradually moved downward and touched a low of $10,542/mt, subsequently fluctuated considerably and finally closed at $10,596.5/mt, down 1.08%, with trading volume reaching 17,000 lots and open interest reaching 319,000 lots. The most-traded SHFE copper 2512 contract opened at 85,300 yuan/mt overnight, touched a high of 85,390 yuan/mt initially, then fluctuated downward and touched a low of 84,500 yuan/mt, subsequently the center of copper prices gradually moved upward and finally closed at 85,020 yuan/mt, down 0.6%, with trading volume reaching 66,000 lots and open interest reaching 229,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On October 20, Arizona Sonoran Copper Company released a pre-feasibility study report for its wholly-owned "Cactus Project" (Arizona): The project is expected to produce approximately 103,000 mt of copper cathode annually (about 226 million pounds) in the first ten years, with a capital intensity of only about $10,894 per mt, and estimated annual EBITDA of about $574 million. The report indicates that the project may become the third largest copper cathode production site in the US.

Spot:

(1) Shanghai: On October 21, SMM #1 copper cathode spot prices against the front-month 2511 contract were reported at parity to a premium of 100 yuan/mt, with the average price quoted at a premium of 50 yuan/mt, down 10 yuan/mt from the previous trading day; SMM #1 copper cathode prices were 85,560-85,900 yuan/mt. The SHFE copper 2511 contract started to pull back from 85,750 yuan/mt in the morning session, briefly touched a low of 85,480 yuan/mt, surged to 85,820 yuan/mt near the end of the first session, then fell back to around 85,600 yuan/mt. The inter-month price spread fluctuated between a contango of 40 yuan/mt and a contango of 10 yuan/mt; import losses for the front-month SHFE copper contract narrowed to around 800 yuan/mt. Looking ahead to today, with copper prices remaining high above 85,000 yuan/mt, downstream purchasing sentiment is unlikely to improve, and spot trades are expected to continue around the parity line tomorrow.

(2) Guangdong: On October 21, 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, flat 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 85,660 yuan/mt, up 70 yuan/mt from the previous trading day, and the average price of SX-EW copper was 85,575 yuan/mt, up 70 yuan/mt from the previous trading day. Overall, although inventory continued to decline, the premium still struggled to rise, and spot trades were weaker than the previous day.

(3) Imported copper: On October 21, warrant prices were $30-40/mt, QP November, with the average price flat 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 flat from the previous trading day. Quotations referred to cargoes arriving in late October.

(4) Secondary Copper: At 11:30 on October 21, the futures closing price was 85,660 yuan/mt, down 130 yuan/mt from the previous trading day. The average spot premium/discount was 50 yuan/mt, down 10 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials remained unchanged MoM. The price of bare bright copper in Guangdong was 77,200-77,400 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 3,370 yuan/mt, up 140 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,775 yuan/mt. According to the SMM survey, copper prices dropped back slightly during the day, but secondary copper raw material traders showed no willingness to cut prices. Secondary copper rod enterprises reported that the supply of secondary copper raw materials in the market was not affected by the pullback in copper prices.

(5) Inventories: On October 20, LME copper cathode inventories decreased by 25 mt to 137,150 mt. On October 21, SHFE warrant inventories decreased by 3,641 mt to 37,678 mt.

Prices: On the macro front, Europe and Ukraine have drafted a 12-point Russia-Ukraine peace plan, proposing to start negotiations based on the current actual control line. The easing of geopolitical tensions and a decline in risk-off sentiment put pressure on copper prices. Meanwhile, Trump announced a planned visit to China early next year. Although China's Ministry of Foreign Affairs stated that there is no specific information yet, market optimism about a trade agreement boosted the US dollar, further suppressing copper prices. On the fundamentals side, supply side, imported and domestic supplies continued to arrive, indicating a generally loose trend. Demand side, high copper prices significantly dampened downstream procurement. Overall, copper prices were under pressure from both macro and fundamental factors, but the bottom is expected to remain supported today.

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