Copper Prices Rise Again to Hit a New Historical High, Downstream Consumption Significantly Suppressed [SMM Macro Weekly Review]

This week, copper prices fluctuated upward and held up well, with macro and geopolitical factors intertwining to dominate the market. The continued US government shutdown and delayed release of key economic data left the US Fed's future interest rate cut path unsupported. Trump's trade stance turned mild, and high-level contacts between China and the US resumed, but geopolitical tensions persisted. Domestically, the 20th CPC Central Committee's fourth plenum boosted market expectations for future policies and infrastructure demand. "Anti-involution" may see further deepening. Overall, copper prices continued their upward fluctuation trend during the week. LME copper broke through $10,900/mt, while SHFE copper also attempted to breach 88,000 yuan/mt.

Fundamentals-wise, the copper concentrate market saw only limited transactions this week, with smelters maintaining previous purchase ranges ahead of long-term contract negotiations. High copper prices led to weak downstream demand. Although some smelters cut production and increased exports, social inventory showed no significant decline overall. Apparent consumption in October is expected to remain weak.

Looking ahead to next week, macro sentiment continues to provide strong support for copper prices, but from a fundamental perspective, copper prices lack sustained upward momentum. LME copper is expected to fluctuate between $10,600-11,000/mt, while SHFE copper is expected to range between 86,500-88,500 yuan/mt. On the spot side, domestic demand shows clear weakness, and downstream consumption is expected to drag on premiums. Spot prices against the SHFE copper 2511 contract are expected to range from a discount of 80 yuan/mt to a premium of 100 yuan/mt.