Expectations for US Fed Interest Rate Cut Weakened, LME Copper Fluctuated and Closed Lower Last Friday [SMM Copper Morning Meeting Minutes]

Monday, 2025.11.17

Futures: Copper prices opened at $10,884.5/mt during Friday's night session, fluctuated downward initially to touch a low of $10,755/mt, then the price center gradually moved up to touch a high of $10,883/mt, and finally closed at $10,824/mt, down 0.12%. Trading volume reached 22,000 lots, and open interest reached 326,000 lots. The most-traded SHFE copper 2512 contract opened at 86,640 yuan/mt during Friday's night session, fluctuated downward initially to 85,900 yuan/mt, then the price center gradually moved up to 86,900 yuan/mt, and finally closed at 86,680 yuan/mt, down 0.64%. Trading volume reached 60,000 lots, and open interest reached 183,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On November 12, Marimaca Copper announced that its oxide copper project in Chile officially passed the review by the Environmental Assessment Service (SEA), marking a key step towards full construction of the company's flagship MOD project. The company stated that obtaining the environmental permit laid an important foundation for subsequent project engineering design, construction preparation, and financing work. According to the latest plan, the MOD project is expected to commence construction in H2 2026. Upon operation, it is expected to become a significant medium-sized copper production project in the region, bringing new capacity additions to the future market pattern of tight copper supply.

Spot:

(1) Shanghai: On November 14, SMM #1 copper cathode spot prices against the front-month 2511 contract were at a discount of 20 yuan/mt to a premium of 130 yuan/mt, with the average price quoted at a premium of 55 yuan/mt, up 5 yuan/mt from the previous trading day; SMM #1 copper cathode prices were 86,920-87,270 yuan/mt. In the morning session, SHFE copper fell significantly compared to the night session, dropping below 87,000 yuan/mt to a low of 86,700 yuan/mt, then began to rise continuously, touching a high of 87,170 yuan/mt. During the morning trading hours, the inter-month price spread fluctuated between Contango 80-Contango 40 yuan/mt, with an extreme touch of Contango 100 yuan/mt. Import losses for the front-month SHFE copper contract hovered around 900 yuan/mt. Looking ahead to this week, under the Contango structure, spot merchants' offers for the next month are expected to hold firm near parity.

(2) Guangdong: On November 14, Guangdong's #1 copper cathode spot prices against the front-month contract were at a discount of 20 yuan/mt to a premium of 50 yuan/mt, with the average premium at 15 yuan/mt, up 10 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 90-50 yuan/mt, with the average discount at 70 yuan/mt, up 10 yuan/mt from the previous trading day. The average price of Guangdong's #1 copper cathode was 86,980 yuan/mt, down 115 yuan/mt from the previous trading day; the average price of SX-EW copper was 86,895 yuan/mt, down 115 yuan/mt from the previous trading day. Spot market: Guangdong inventory declined for the fourth consecutive day, primarily due to reduced arrivals and increased warehouse withdrawals. After copper prices fell, downstream restocking volume increased, and suppliers held prices firm to sell, leading to improved overall trading compared to yesterday. Today, the procurement sentiment for copper cathode in Guangdong was 1.65, up 0.28 from the previous trading day, while the sales sentiment was 2.52, down 0.34 from the previous trading day (historical data can be queried in the database). As of 11:00, the front-month contract quotes were: high-quality copper at a premium of 50 yuan/mt, standard-quality copper at a discount of 20 yuan/mt, and SX-EW copper at a discount of 70 yuan/mt. Overall, as copper prices fell, downstream restocking increased, spot premiums rose slightly, and overall trading improved slightly.

(3) Imported copper: On November 14, warrant prices were $28-40/mt, QP November, with the average price flat from the previous trading day; B/L prices were $40-52/mt, QP November, with the average price flat from the previous trading day; EQ copper (CIF B/L) was -$8/mt to $4/mt, QP November, with the average price up $1/mt from the previous trading day. Quotes refer to shipments arriving in mid-to-late November.

(4) Secondary copper: At 11:30 on November 14, the futures closing price was 87,050 yuan/mt, down 240 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 remained unchanged MoM. The price of bare bright copper in Guangdong was 78,500-78,700 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 3,488 yuan/mt, down 235 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,660 yuan/mt. According to an SMM survey, secondary copper rod enterprises reported that government support may resume in some regions, but specific implementation details will only be known after tax payments next week.

(5) Inventory: On November 13, LME copper cathode inventories decreased by 450 mt to 135,725 mt; on November 14, SHFE warrant inventories increased by 5,873 mt to 49,830 mt.

Prices: On the macro front, there are clear divisions within the US Fed regarding interest rate cuts, with Logan and Schmid advocating caution, while Governor Milan supports a more accommodative stance. Meanwhile, former Governor Kugler faced an ethics investigation before resigning. As market expectations for US Fed interest rate cuts weakened, the US dollar index rebounded slightly, putting pressure on copper prices. On the fundamentals, the tight spot supply of copper cathode persists, particularly for high-quality copper. Demand side remains weak, with strong wait-and-see sentiment in the market. Overall, macro pressure and weak demand constrain copper prices, which are expected to have limited upside room and trade under pressure today.