Expectations for US Fed Interest Rate Cut in December Decline, LME Copper Fluctuates and Closes Lower Last Friday [SMM Copper Morning Meeting Minutes]

Monday, November 3, 2025
Futures: LME copper opened at $10,857.5/mt overnight last Friday. At the beginning of the session, copper prices gradually moved upward, touching a high of $10,948/mt, then fluctuated downward to a low of $10,834.5/mt, subsequently fluctuated upward and finally closed at $10,891.5/mt, a decrease of 0.35%. Trading volume reached 21,000 lots, and open interest reached 336,000 lots. The most-traded SHFE copper contract 2512 opened at 87,210 yuan/mt overnight. At the beginning of the session, it touched a low of 86,700 yuan/mt, then fluctuated upward, approaching the high of 87,450 yuan/mt near the end of the session, subsequently fluctuated downward and finally closed at 87,130 yuan/mt, a decrease of 0.09%. Trading volume reached 76,000 lots, and open interest reached 254,000 lots.
[SMM Copper Morning Conference Minutes] News:
(1) On October 31, Anglo American stated that its Collahuasi copper mine in Chile is facing declining ore grade issues, and production next year will be constrained. Output is expected to return to normal levels only in 2027. Ruben Fernandes, COO of Anglo American, said in an interview that the Collahuasi copper mine's annual production is expected to rebound to about 600,000 mt in 2027. This is mainly because the mine will extract areas with higher ore grades in the open pit, and a newly built desalination plant will be fully operational next year. The copper mine is 44% owned by Anglo American and Glencore respectively, with the remaining 12% stake held by Mitsui & Co.
Spot:
(1) Shanghai: On October 31, SMM #1 copper cathode spot prices against the front-month 2511 contract were at a discount of 80 yuan/mt to a premium of 80 yuan/mt, with the average price quoted at parity, up 55 yuan/mt from the previous trading day. SMM #1 copper cathode prices were 87,340-87,800 yuan/mt. Overnight, SHFE copper fell below 88,000 yuan/mt, briefly testing 87,000 yuan/mt. According to trader feedback, downstream fixed-price purchases were relatively active. Prices rebounded to around 87,500 yuan/mt in the early session, briefly surged after 11:00 AM, touching 87,800 yuan/mt. The inter-month spread narrowed significantly to within Contango 30 yuan/mt, and the import loss for the front-month SHFE copper contract narrowed to within 900 yuan/mt. Looking ahead this week, with copper prices falling and the delivery date approaching, spot premiums are expected to remain relatively firm, and the trading center is gradually moving towards the parity price level.
(2) Guangdong: On October 31, 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, flat from the previous trading day. SX-EW copper was quoted at a discount of 100-60 yuan/mt, with the average discount at 80 yuan/mt, flat from the previous trading day. The average price for Guangdong #1 copper cathode was 87,510 yuan/mt, down 605 yuan/mt from the previous trading day. The average price for SX-EW copper was 87,430 yuan/mt, down 605 yuan/mt from the previous trading day. Overall, with the significant drop in copper prices, downstream procurement volume increased slightly, and overall trading activity was better than yesterday.
(3) Imported copper: On Oct 31, warrant prices were $32-40/mt, QP November, with the average price flat from the previous trading day; B/L prices were $42-62/mt, QP November, with the average price flat from the previous trading day; EQ copper (CIF B/L) was -$20/mt to -$4/mt, QP November, with the average price flat from the previous trading day. Quotations referred to cargoes arriving in late October and early November.
(4) Secondary copper: At 11:30 on Oct 31, the futures closing price was 87,350 yuan/mt, down 8,500 yuan/mt from the previous trading day; the average spot premium/discount was 0 yuan/mt, up 55 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials decreased by 300 yuan/mt MoM. The price of bare bright copper in Guangdong was 78,300-78,500 yuan/mt, down 300 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 3,966 yuan/mt, down 456 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,725 yuan/mt. According to an SMM survey, as favorable factors at home and abroad were successively realized, copper prices retreated significantly in the afternoon. Secondary copper rod enterprises received a large number of delivery orders for recycled copper raw materials again. One secondary copper rod enterprise stated that as raw material inventory is currently at a relatively high level, it might start an additional furnace for production from next week to ensure raw material inventory remains near the safety line.
(5) Inventory: On Oct 30, LME copper cathode inventory decreased by 325 mt to 134,625 mt; on Oct 31, SHFE warrant inventory increased by 2,273 mt to 39,710 mt.
Prices: On the macro front, there are clear divergences within the US Fed regarding interest rate policy. Although one governor believed tariffs have not pushed up inflation and predicted a possible rate cut in December, most officials publicly opposed a near-term rate cut, emphasizing the need to maintain restrictive policies to control inflation, lowering market expectations for a December rate cut to about 50%. The White House's assessment of the economic situation is also mixed; Hassett expected Q3 growth to be close to 4%, while Besant pointed out that some sectors have already fallen into recession and called for rate cuts. Against this backdrop, hawkish comments from several officials opposing rate cuts pushed the US dollar stronger, weighing on copper prices. On the fundamentals, the supply side showed structural tightness, with high-quality copper and non-registered sources scarce, while standard-quality copper supply was relatively eased. Demand was suppressed by high prices, with purchase willingness weak. Overall, copper prices are expected to fluctuate rangebound at high levels today.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this to replace their independent judgment. Any decisions made by clients are unrelated to SMM.]