Flooding Persists in Queensland, Australia, LME Copper Plummets Overnight [SMM Copper Morning Meeting Minutes]

Friday, January 9, 2026
Futures: Overnight, LME copper opened at $12,818/mt, touched a high of $12,913/mt at the beginning of the session, then the price center moved straight down, hit bottom at $12,517/mt, and finally consolidated sideways to close at $12,702/mt, down 1.27%. Trading volume decreased by 8,314 lots to 35,000 lots, and open interest decreased by 4,836 lots to 325,000 lots, mainly driven by long liquidation. Overnight, the most-traded SHFE copper 2602 contract opened at 101,660 yuan/mt, touched a high of 101,880 yuan/mt at the opening, then the price center moved down to hit bottom at 98,780 yuan/mt, and finally consolidated sideways to close at 100,310 yuan/mt, down 1.61%. Trading volume decreased by 144,000 lots to 159,000 lots, and open interest decreased by 10,421 lots to 194,000 lots, also mainly driven by long liquidation.
[SMM Copper Morning Meeting Minutes] News:
(1) On January 7, Australian media reported that due to monsoon rains, flooding in northwestern Queensland is expected to persist for the coming weeks, with several rivers still at peak flood levels, isolating some inland towns and major transport routes. Meteorological authorities indicated that although the overall weather trend has eased, the ground is saturated with water, leading to slow flood recession, and risks of further heavy rainfall and flash floods remain in some areas. There is no clear information yet indicating large-scale disruptions to local non-ferrous metal mine production from this round of flooding, but road and regional logistics constraints pose potential risks to subsequent ore and concentrate transportation, and the related impacts still require continuous monitoring.
Spot:
(1) Shanghai: On the morning of January 8, the SHFE copper 2601 contract first rose then fell. It opened at 101,600 yuan/mt, continued to rise to a high of 102,750 yuan/mt, then continued to fall, testing below 101,500 yuan/mt twice, and returned to 101,730 yuan/mt by the close. The Contango spread between the front-month and next-month contracts ranged from 110 yuan/mt to 200 yuan/mt. The import loss for SHFE front-month copper ranged from 550-800 yuan/mt. Looking ahead to today, spot prices are expected to continue trading at a discount, but market purchases will be monitored as the delivery date approaches.
(2) Guangdong: On January 8, spot #1 copper cathode in Guangdong was quoted at a discount of 20 yuan/mt to a premium of 30 yuan/mt against the front-month contract, with an average premium of 5 yuan/mt, up 15 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 90 yuan/mt to 70 yuan/mt, with an average discount of 80 yuan/mt, up 30 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 102,495 yuan/mt, down 790 yuan/mt from the previous trading day. The average price of SX-EW copper was 102,435 yuan/mt, down 770 yuan/mt from the previous trading day. Overall, as copper prices fell, downstream restocking volume increased compared to yesterday, and overall trading continued to improve.
(3) Imported copper: Warrant prices were $34-50/mt on January 8, QP January, with the average price up $3/mt from the previous trading day; B/L prices were $38-54/mt, QP February, with the average price up $2/mt from the previous trading day; EQ copper (CIF B/L) was -$2-16/mt, QP February, with the average price up $3/mt from the previous trading day. Quotations referred to cargoes arriving in the first half of January.
(4) Secondary copper: The futures closing price was 101,730 yuan/mt at 11:30 on January 8, down 2,050 yuan/mt from the previous trading day; the average spot premiums/discounts were -65 yuan/mt, down 15 yuan/mt from the previous trading day. Today, recycled copper raw materials prices fell 800 yuan/mt MoM; Guangdong bare bright copper prices were 88,500-88,700 yuan/mt, down 800 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 4,834 yuan/mt, down 1,191 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 2,320 yuan/mt. According to the SMM survey, copper prices retreated significantly, narrowing the price difference between copper cathode and copper scrap. Traders took profits on futures arbitrage, boosting their willingness to sell, leading to an expansion in price deductions. End-user just-in-time procurement volume showed some recovery.
Prices: On the macro front, the precious metals market cooled as bulls took profits, and copper prices followed the downward trend. Regarding the US Fed, several officials remained optimistic about further interest rate cuts, and the market generally awaited further data to support interest rate decisions. Supply side, imported cargo arrivals remained tight, while domestic cargo arrivals were stable. Demand side, affected by the copper price pullback, overall procurement sentiment remained cautious. Inventory side, as of January 9, SMM social inventory in mainstream areas increased 6.29% WoW to 273,800 mt. Overall, copper prices were expected to have limited upside room today.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this to replace independent judgment. Any decisions made by clients are unrelated to SMM.]