Expectations for US Fed Interest Rate Cut in December Rise, LME Copper Surged Significantly Last Friday [SMM Copper Morning Meeting Minutes]

Monday, December 1, 2025

Futures: LME copper opened at $11,008.5/mt last Friday night, fluctuated rangebound initially and touched a low of $10,986.5/mt, then the center of copper prices gradually moved upward, touching a high of $11,210.5/mt, subsequently fluctuated considerably and finally closed at $11,175.5/mt, a gain of 2.25%, with trading volume reaching 22,600 lots and open interest reaching 334,000 lots. The most-traded SHFE copper contract 2601 opened at 87,630 yuan/mt overnight, touched a low of 87,520 yuan/mt initially, then fluctuated upward and touched a high of 89,000 yuan/mt, subsequently fluctuated considerably and finally closed at 88,740 yuan/mt, a gain of 1.75%, with trading volume reaching 85,000 lots and open interest reaching 225,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On November 28, the president of the Japan Mining Industry Association (JMIA) said on Thursday that Japanese copper smelters are negotiating treatment and refining charges (TC/RC) for 2026 with global miners, seeking agreements different from the benchmark set in China, and the Chinese benchmark is expected to remain low.

Spot:

(1) Shanghai: On November 28, SMM's #1 copper cathode spot prices against the front-month 2512 contract were quoted at a premium of 10 yuan/mt to a premium of 210 yuan/mt, with the average price quoted at a premium of 110 yuan/mt, up 5 yuan/mt from the previous trading day; SMM #1 copper cathode prices were 87,190-87,610 yuan/mt. In the morning session, SHFE copper continued to rise and stabilized above 87,000 yuan/mt, then advanced to 87,430 yuan/mt. The inter-month price spread was at contango 70-50 yuan/mt, and the import arbitrage loss for the front-month SHFE copper contract was around 1,000 yuan/mt. Looking ahead this week, as December begins and during long-term contract negotiations, suppliers are expected to maintain firm quotations. However, if copper prices continue to rise, spot premiums for SHFE copper are expected to come under pressure.

(2) Guangdong: On November 28, Guangdong's #1 copper cathode spot prices against the front-month contract were quoted at a premium of 80 yuan/mt to a premium of 160 yuan/mt, with the average premium at 120 yuan/mt, unchanged from the previous trading day; SX-EW copper was quoted at a discount of 10 yuan/mt to a premium of 30 yuan/mt, with the average premium at 10 yuan/mt, unchanged from the previous trading day. The average price of Guangdong's #1 copper cathode was 87,330 yuan/mt, up 270 yuan/mt from the previous trading day, and the average price of SX-EW copper was 87,220 yuan/mt, up 270 yuan/mt from the previous trading day. Overall, downstream restocking demand was weak at month-end, but suppliers insisted on high premiums, keeping spot premiums flat compared to the previous day.

(3) Imported copper: On November 28, warrant prices were $26-38/mt, QP December, with the average price flat from the previous day; B/L prices were $42-54/mt, QP December, with the average price flat from the previous day; EQ copper (CIF B/L) was quoted at -$6/mt to $8/mt, QP December, with the average price flat from the previous day. Quotations referred to cargoes arriving in mid-to-late November and early December.

(4) Secondary Copper: At 11:30 on November 28, the futures closing price was 87,370 yuan/mt, up 510 yuan/mt from the previous trading day. The average spot premium/discount was 110 yuan/mt, up 5 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials rose 100 yuan/mt MoM. The price of bare bright copper in Guangdong was 78,800-79,000 yuan/mt, up 100 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 3,544 yuan/mt, down 409 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,970 yuan/mt. According to the SMM survey, secondary copper rod traders reported a slight decline in secondary copper rod inventories this week. As downstream customers had not picked up goods for a relatively long time, they placed orders only for essential restocking. It is expected that secondary copper rod inventories will build up again next week.

(5) Inventories: On November 27, LME copper cathode inventories increased by 2,250 mt to 159,425 mt. On November 28, SHFE warrant inventories decreased by 629 mt to 35,244 mt.

Prices: On the macro front, expectations that Trump intends to nominate a dovish candidate as Fed Chairman heated up, boosting market optimism for an interest rate cut in December. The US dollar came under pressure, providing support for copper prices. Meanwhile, Chile's copper production in October fell 7% YoY, further exacerbating market concerns about tight supply, jointly creating a bullish factor for copper prices. On the fundamentals, supply side, the spot market was generally tight, with particularly tight supply of high-quality copper. Demand side, the rapid surge in copper prices significantly dampened downstream purchasing sentiment. Overall, copper prices are expected to have limited upside 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 independent judgment. Any decisions made by clients are unrelated to SMM.]