ENAMI's New Smelter Approved, LME Copper Fell Sharply Last Night [SMM Copper Morning Meeting Minutes]

Friday, October 31, 2025

Futures: LME copper opened at $11,044/mt overnight. It hit a high of $11,062.5/mt at the beginning of the session, then copper prices fluctuated downward, touching a low of $10,875/mt near the session's end, and finally closed at $10,930/mt, down 1.44%. Trading volume reached 35,000 lots, and open interest stood at 333,000 lots. The most-traded SHFE copper 2512 contract opened at 87,380 yuan/mt overnight. It hit a high of 87,450 yuan/mt at the opening, then fluctuated downward to a low of 86,530 yuan/mt, finally closing at 87,270 yuan/mt, down 1.38%. Trading volume reached 147,000 lots, and open interest was 266,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On October 30, Chilean state-owned mining company ENAMI announced it had obtained environmental permits to build a new $1.7 billion copper smelter. This smelter is part of the modernization of its Hernan Videla Lira smelter in the northern Atacama region. The new facility can process up to 850,000 mt of copper concentrates annually, and its electrorefining plant can produce up to 240,000 mt of copper cathode.

Spot:

(1) Shanghai: On October 30, SMM #1 copper cathode spot prices against the front-month 2511 contract were at a discount of 130 yuan/mt to a premium of 20 yuan/mt, with the average price at a discount of 55 yuan/mt, up 5 yuan/mt from the previous trading day. The SMM #1 copper cathode price ranged from 87,800 to 88,330 yuan/mt. In early trading, the SHFE copper 2511 contract fell sharply from 89,000 yuan/mt to around 88,200 yuan/mt, then fluctuated rangebound. The inter-month price spread fluctuated between a contango of 50 yuan/mt and a contango of 20 yuan/mt, while the import loss was nearly 1,000 yuan/mt. Looking ahead to today, Friday, downstream stocking is expected to increase. However, high copper prices have led suppliers to adopt a "slack" attitude towards selling. Spot transactions are expected to remain at low price levels.

(2) Guangdong: On October 30, Guangdong #1 copper cathode spot prices against the front-month contract were at a discount of 30 yuan/mt to a premium of 30 yuan/mt, with the average premium at 0 yuan/mt, down 10 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 100 yuan/mt to a discount of 60 yuan/mt, with the average discount at 80 yuan/mt, down 10 yuan/mt from the previous day. The average price of Guangdong #1 copper cathode was 88,115 yuan/mt, up 265 yuan/mt from the previous day, while the average price of SX-EW copper was 88,035 yuan/mt, also up 265 yuan/mt. Overall, as copper prices hit new highs and coincided with the month-end, spot market trading was sluggish, and premiums declined.

(3) Imported copper: On October 30, warrant prices were $32-40/mt, QP November, with the average price up $1/mt from the previous trading day; bill of lading (B/L) prices were $42-62/mt, QP November, with the average price down $1/mt from the previous day; EQ copper (CIF B/L) was at -$20/mt to -$4/mt, QP November, with the average price down $1/mt from the previous day. Quotations referred to cargoes arriving in late October and early November.

(4) Secondary copper: At 11:30 on October 30, the futures closing price was 88,200 yuan/mt, up 330 yuan/mt from the previous trading day. The average spot premium/discount was -55 yuan/mt, up 5 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials rose 200 yuan/mt MoM. The price of bare bright copper in Guangdong was 78,600-78,800 yuan/mt, up 200 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 4,422 yuan/mt, up 123 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,920 yuan/mt. According to the SMM survey, as copper prices experienced a significant pullback during the week, many secondary copper rod enterprises reported that their current raw material procurement volume far exceeded expectations. Even after lowering procurement prices, many recycled copper raw material traders, concerned about further declines in copper prices, chose to sell off their inventories. This led to a sharp increase in raw material inventories for secondary copper rod enterprises. Additionally, in terms of policy, some regions plan to resume measures related to investment promotion next month. The combination of high raw material inventories and gradually clearer policies has stimulated secondary copper rod enterprises to resume production earlier.

(5) Inventory: On October 29, LME copper cathode inventories decreased by 400 mt to 134,950 mt. On October 30, SHFE warrant inventories increased by 1,692 mt to 37,437 mt.

Price: On the macro front, Powell's hawkish stance on the US Fed's interest rate cuts pushed the US dollar index higher, putting pressure on copper prices. On the fundamentals side, supply side, arrivals of imported cargoes declined, while state-owned supplies remained stable, leading to a tightening supply. Demand side, affected by copper prices fluctuating at highs, overall consumption remained weak. As of October 30, SMM's social inventory of copper in mainstream regions across China fell by 1,900 mt MoM to 182,600 mt. Overall, lingering positive sentiment from macro trade and tightening supply on the fundamentals are expected to provide support for copper prices 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 independent judgment. Any decisions made by clients are unrelated to SMM.]