The Alumbrera mine is expected to commence production in 2028. Overnight, LME copper fluctuated and closed lower [SMM Copper Morning Meeting Minutes].

Friday, December 5, 2025

Futures: LME copper opened at $11,402/mt overnight. It fluctuated considerably at the beginning of the session, dipping to $11,382/mt, then fluctuated upward to touch a high of $11,479/mt, before fluctuating considerably again and finally closing at $11,434/mt, down 0.13%. Trading volume reached 24,500 lots and open interest reached 341,000 lots. The most-traded SHFE copper contract 2601 opened at 90,600 yuan/mt overnight, dipped to 90,400 yuan/mt at the beginning of the session, then fluctuated considerably and touched a high of 91,090 yuan/mt near the end of the session, finally closing at 90,960 yuan/mt, up 0.19%. Trading volume reached 65,700 lots and open interest reached 230,000 lots.

[SMM Copper Morning Meeting Minutes] News:

(1) On December 4, Glencore indicated that the Alumbrera project is expected to commence production in H1 2028.

(2) On December 4, Kamoa-Kakula set its copper production target for 2026 at 380,000 to 420,000 mt and for 2027 at 500,000 to 540,000 mt, with the medium-term copper production target maintained at 550,000 mt. Regarding recent progress, drainage work at the Kakula mine is proceeding smoothly (70% complete on the west side, 60% on the east side), laying the foundation for production resumption. Furthermore, with the announcement of the Kamoa-Kakula copper smelter commencing operations on December 1, 2025, copper sales in 2026 are expected to exceed copper production, due to an anticipated reduction of approximately 20,000 mt copper equivalent in unsold copper concentrate inventory on site.

Spot:

(1) Shanghai: On December 4, SMM's #1 copper cathode spot prices against the front-month 2512 contract were quoted at a premium of 60-280 yuan/mt, with an average premium of 170 yuan/mt, up 30 yuan/mt from the previous trading day; the SMM #1 copper cathode price ranged from 90,960 to 91,530 yuan/mt. In the morning session, SHFE copper futures continued to rise, reaching 91,360 yuan/mt before briefly giving up some gains, and climbed back above 91,300 yuan/mt near the morning close. The inter-month price spread fluctuated between Contango 80 and Contango 20 yuan/mt, and the import arbitrage loss for front-month SHFE copper expanded to over 1,700 yuan/mt. Looking ahead to tomorrow, as copper prices break through historical highs and Shanghai spot copper premiums remain firm, premiums are expected to stay firm tomorrow provided there is no significant replenishment of supply.

(2) Guangdong: On December 4, Guangdong's #1 copper cathode spot prices against the front-month contract were quoted at a premium of 30-120 yuan/mt, with an average premium of 75 yuan/mt, down 10 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 60-20 yuan/mt, with an average discount of 40 yuan/mt, down 10 yuan/mt from the previous trading day. The average price for Guangdong's #1 copper cathode was 91,135 yuan/mt, up 2,180 yuan/mt from the previous trading day, while the average price for SX-EW copper was 91,020 yuan/mt, up 2,180 yuan/mt from the previous trading day. Overall, copper prices surged, and downstream wait-and-see sentiment was strong, with spot trades very weak.

(3) Imported copper: On December 4, warrant prices were $30-46/mt, QP December, with the average price flat from the previous trading day; B/L prices were $42-54/mt, QP December, with the average price flat from the previous trading day; EQ copper (CIF B/L) was $0-14/mt, QP December, with the average price up $4/mt from the previous trading day. Quotations referred to cargoes arriving in the first half of December.

(4) Secondary copper: At 11:30 on December 4, the futures closing price was 91,250 yuan/mt, up 2,140 yuan/mt from the previous trading day; the spot premiums/discounts averaged 170 yuan/mt, up 30 yuan/mt from the previous trading day. Today, recycled copper raw materials prices rose 1,300 yuan/mt MoM. Guangdong bare bright copper prices were 81,000-81,200 yuan/mt, up 1,300 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 5,142 yuan/mt, up 787 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 2,435 yuan/mt. According to the SMM survey, amid the sharp rise in copper prices, many secondary copper rod enterprises indicated that as long as secondary copper rod prices were slightly lower than market prices, transactions could be made. However, downstream fear of high prices was strong, and intraday transactions were average.

(5) Inventory: On December 3, LME copper cathode inventories increased by 675 mt to 162,825 mt; on December 4, SHFE warrant inventories decreased by 3,170 mt to 32,139 mt.

Prices: On the macro front, White House official Hassett signaled that the US Fed might cut interest rates by 25 basis points at the next meeting. Meanwhile, the latest data showed that US initial jobless claims for the previous week came in at 191,000, below market expectations of 220,000. Affected by this employment data and market expectations for a US Fed interest rate cut next week, the US dollar index closed slightly higher. On the fundamentals side, supply side, arrivals of both imported and domestic cargoes were low; demand side, high copper prices suppressed downstream enterprises' purchase willingness, with mostly rigid demand. Inventory side, as of Thursday, December 4, SMM copper inventories in mainstream regions across China decreased by 100 mt from Monday to 158.9k mt. 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.]