US Dollar Index Recovers, LME Copper Edges Down, Copper Prices Fluctuate Rangebound Within the Week [SMM Macro Weekly Review]

Copper prices consolidated after a slight correction this week. At the beginning of the week, following the concentrated realization of previous macro tailwinds, both LME copper and SHFE copper experienced significant declines, before gradually stabilizing as bulls and bears re-engaged. After the US Fed implemented the interest rate cut, internal divisions between hawks and doves continued to widen. November's non-farm payrolls data appeared stronger than expectations, but the unemployment rate rose to 4.6%, a four-year high. Coupled with inflation data pulling back more than expected, this left room for market expectations of continued easing early next year. On Friday, the Bank of Japan announced a 25 basis point interest rate hike, which was lower than market expectations. The US dollar index saw a slight overall recovery, putting pressure on copper prices. Domestically, the Central Economic Work Conference released positive signals aimed at stabilizing growth and supporting demand, providing some support to market sentiment. This week, LME copper fluctuated between $11,500–12,000/mt, while SHFE copper saw repeated back-and-forth movement within the range of 91,500–94,500 yuan/mt.
Fundamentals side, copper concentrate long-term contract negotiations remained in the third round of discussions this week. Copper cathode long-term contract negotiations were in full swing; some Chinese smelters issued offers for 2026 bonded area long-term contracts and export long-term contracts this week, but market divergence remained significant, with no actual deals heard yet. Demand side, year-end performance was weak, with poor domestic trade consumption leading to a significant decline in premiums.
Looking ahead to next week, the macro front is expected to be quiet, and the results of the copper concentrate long-term contract negotiations are anticipated to be announced. Overall support for copper prices remains strong. LME copper is expected to fluctuate between $11,600-12,000/mt, and SHFE copper between 92,500-94,500 yuan/mt. Spot side, year-end market demand is weak, and traders also have significant repayment needs. Spot prices against the SHFE copper 2601 contract are expected to range from a discount of 240 yuan/mt to a discount of 80 yuan/mt.