U.S. November ADP Employment Unexpectedly Declines, LME Copper Surges Overnight [SMM Copper Morning Meeting Minutes]

Thursday, December 4, 2025

Futures: LME copper opened at $11,402.5/mt overnight. It initially moved down, touching a low of $11,330.5/mt, then the center of copper prices gradually shifted upward, reaching a high of $11,540/mt, before fluctuating downward and finally closing at $11,448.5/mt, a gain of 2.72%. Trading volume reached 44,100 lots, and open interest reached 335,000 lots. The most-traded SHFE copper 2601 contract opened at 90,070 yuan/mt overnight. It initially dipped to 90,050 yuan/mt, then fluctuated upward, approaching the session end and touching a high of 91,240 yuan/mt, before finally closing at 90,760 yuan/mt, a gain of 2.01%. Trading volume reached 126,500 lots, and open interest reached 231,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On December 2, Vale and Glencore were evaluating forming a joint copper mine project in Canada's Sudbury Basin, with an estimated investment of approximately $1.6–2 billion, targeting the production of approximately 880,000 mt of copper over 21 years to increase their exposure to copper resources amid the energy transition. The project plan includes deepening the Nickel Rim South shaft and constructing new drifts to develop copper resources from their adjacent mining areas, while potentially producing critical minerals such as nickel, cobalt, and gold. The two companies plan to commence engineering design, approvals, and community consultations in 2026; if progress is smooth, a final investment decision is expected in H1 2027.

Spot:

(1) Shanghai: On December 3, SMM's #1 copper cathode spot prices against the front-month 2512 contract were quoted at a premium of 40-240 yuan/mt, with an average premium of 140 yuan/mt, up 20 yuan/mt from the previous trading day. SMM's #1 copper cathode prices were 88,730-89,230 yuan/mt. SHFE copper futures mainly fluctuated within the range of 88,700-89,000 yuan/mt during the morning session, rising to 89,150 yuan/mt after 11 a.m. The inter-month price spread showed a contango of 80-40 yuan/mt, and the import arbitrage loss for the front-month SHFE copper contract was nearly 1,500 yuan/mt. For today, premiums are expected to remain firm, with attention on actual downstream transactions.

(2) Guangdong: On December 3, Guangdong's #1 copper cathode spot prices against the front-month contract were quoted at a premium of 40-130 yuan/mt, with an average premium of 85 yuan/mt, down 5 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 50-10 yuan/mt, with an average discount of 30 yuan/mt, down 10 yuan/mt from the previous trading day. The average price for Guangdong's #1 copper cathode was 88,955 yuan/mt, up 315 yuan/mt from the previous trading day, while the average price for SX-EW copper was 88,840 yuan/mt, up 310 yuan/mt from the previous trading day. Overall, despite the renewed decline in inventory, downstream buyers remained reluctant to increase purchases, resulting in generally poor transactions.

(3) Imported copper: On December 3, warrant prices were $30-46/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 $12/mt, QP December, with the average price flat from the previous day. Quotations refer to cargoes arriving in the first half of December.

(4) Secondary Copper: At 11:30 on December 3, the futures closing price was 89,110 yuan/mt, up 620 yuan/mt from the previous trading day. The average spot premium/discount was 140 yuan/mt, up 20 yuan/mt from the previous trading day. Today, the price of recycled copper raw materials remained flat MoM. The price of bare bright copper in Guangdong was 79,700-79,900 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 4,356 yuan/mt, down 160 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 2,210 yuan/mt. According to the SMM survey, while secondary copper rod enterprises in Jiangxi and Hubei have largely suspended production, enterprises in other regions indicated that the supply of recycled copper raw materials in the market is relatively ample. However, as the year-end approaches, copper prices have risen instead of falling, downstream orders have declined more than expected, and secondary copper rod enterprises are also reluctant to restock raw materials amid high copper prices.

(5) Inventories: On December 2, LME copper cathode inventories increased by 350 mt to 162,150 mt; on December 3, SHFE warrant inventories decreased by 1,599 mt to 28,969 mt.

Prices: On the macro front, US ADP employment in November unexpectedly fell by 32,000, the lowest level since March 2023, far below market expectations for an increase. Combined with Treasury Secretary Yellen's comments on interest rate cuts, this put pressure on the US dollar, supporting copper prices. Meanwhile, Glencore's downward revision of its near-to-medium-term copper production expectations intensified market concerns about short-term supply tightness, further bolstering copper prices. On the fundamentals side, supply remains tight, with scarce availability of high-quality copper, and even standard-grade copper circulation appears constrained. On the demand side, rapid copper price increases have dampened purchasing sentiment, making downstream buyers more cautious. Overall, macro and supply-side positives provide significant support for copper prices, but the inhibitory effect of high prices on demand is gradually becoming apparent. 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 or decision-making advice. Clients should make decisions cautiously and not use this to replace their own independent judgment. Any decisions made by clients are unrelated to SMM.]