The Bank of Japan raised interest rates by 25 basis points as expected, and LME copper fluctuated and closed higher last Friday [SMM Copper Morning Meeting Minutes]

Monday, December 22, 2025
Futures: LME copper opened at $11,787/mt last Friday night, initially touched a low of $11,785.5/mt, then the price center gradually rose to a high of $11,928/mt, fluctuated rangebound, and finally closed at $11,870.5/mt, an increase of 1.22%, with a trading volume of 19,400 lots and open interest of 342,000 lots. The most-traded SHFE copper contract 2602 opened at 93,540 yuan/mt last Friday night, initially touched a high of 94,120 yuan/mt, then the price center moved down to probe a low of 93,410 yuan/mt, subsequently fluctuated rangebound and finally closed at 93,560 yuan/mt, an increase of 0.91%, with a trading volume of 86,000 lots and open interest of 240,000 lots.
[SMM Copper Morning Meeting Minutes] News:
(1) On December 19, representatives of Chinese copper smelters and Antofagasta finalised the 2026 copper concentrate long-term contract benchmark TC at $0/mt and 0¢/lb. The 2025 copper concentrate long-term contract benchmark TC was $21.25/mt and 2.125¢/lb.
Spot:
(1) Shanghai: On December 19, SMM's #1 copper cathode spot prices against the front-month 2601 contract were at a discount of 220-100 yuan/mt, with an average discount of 160 yuan/mt, down 20 yuan/mt from the previous trading day; SMM #1 copper cathode prices were 92,130-92,570 yuan/mt. In the morning session, the SHFE copper 2601 contract fluctuated rangebound between 92,350-92,670 yuan/mt, with the inter-month price spread basically between contango 150-100. During the day, supplier offers declined as expected compared to yesterday, and downstream demand was also sluggish. Looking ahead to this week, the overall market structure is unlikely to change significantly before year-end settlement. As downstream users in the north gradually enter the off-season, inventory buildup pressure in Shanghai is expected to continue increasing, and premiums are expected to remain low.
(2) Guangdong: On December 19, Guangdong's #1 copper cathode spot prices against the front-month contract were at a discount of 10 yuan/mt to a premium of 50 yuan/mt, with an average premium of 20 yuan/mt, down 30 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 80-60 yuan/mt, with an average discount of 70 yuan/mt, down 20 yuan/mt from the previous trading day. The average price of Guangdong's #1 copper cathode was 92,455 yuan/mt, up 115 yuan/mt from the previous trading day; the average price of SX-EW copper was 92,365 yuan/mt, up 125 yuan/mt from the previous trading day. Overall, downstream restocking desire was weak, suppliers actively lowered prices to sell, and spot premiums turned into discounts.
(3) Imported copper: On December 19, warrant prices were $37-49/mt, QP January, with the average price down $1/mt from the previous trading day; B/L prices were $44-54/mt, QP January, with the average price down $1/mt from the previous trading day; EQ copper (CIF B/L) was $6-16/mt, QP January, with the average price down $1/mt from the previous trading day. Quotations referred to cargoes arriving in late December and early January.
(4) Secondary copper: At 11:30 on December 19, the futures closing price was 92,650 yuan/mt, up 410 yuan/mt from the previous trading day. The average spot premium/discount was -160 yuan/mt, down 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 82,000-82,200 yuan/mt, unchanged from the previous trading day. The price difference between copper cathode and copper scrap was 4,683 yuan/mt, up 390 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 2,125 yuan/mt. According to the SMM survey, recycled copper raw material import traders reported that the overseas quotation coefficient for recycled copper raw materials was raised due to the pullback in copper prices this week, but there was still a gap compared to the quotation coefficient from local overseas traders, resulting in very few transactions this week. Domestically, due to the demand for tax-included raw materials from secondary copper rod enterprises, the transaction volume of domestic recycled copper raw materials showed little difference from last week.
(5) Inventory: On December 18, LME copper cathode inventories decreased by 3,875 mt to 160,400 mt; on December 19, SHFE warrant inventories increased by 1,089 mt to 45,739 mt.
Prices: On the macro front, the Bank of Japan raised interest rates by 25 basis points as expected but indicated uncertainty about the timing of future rate hikes. In addition, several US Fed officials expressed hawkish views on further interest rate cuts, and the probability of the US Fed maintaining unchanged rates in January increased to 79%. On the fundamentals side, supply side, suppliers were actively selling, and spot market circulation was loose. Demand side, downstream procurement remained cautious. Overall, under the combined effect of hawkish expectations from the US Fed and weak demand, copper prices were expected to have limited upside potential 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 independent judgment. Any decisions made by clients are unrelated to SMM.]