Geopolitical tensions triggered profit-taking by bulls, copper price volatility intensified [SMM Copper Morning Meeting Minutes]

Wednesday, January 28, 2026
Futures: LME copper opened at $13,088.5/mt overnight. It climbed to $13,145/mt at the beginning of the session, then the price center gradually moved down, touching a low of $12,893/mt, before fluctuating upward and finally closing at $13,024/mt, down 1.21%. Trading volume reached 26,700 lots, and open interest stood at 332,000 lots, down 1,283 lots from the previous trading day, with the overall performance indicating long position reduction. The most-traded SHFE copper 2603 contract opened at 101,900 yuan/mt overnight. It touched a high of 102,410 yuan/mt early in the session, then fluctuated downward all the way, probing a low of 100,700 yuan/mt, before the price center gradually moved up and finally closed at 101,560 yuan/mt, down 1.18%. Trading volume reached 112,700 lots, and open interest stood at 226,000 lots, down 3,788 lots from the previous trading day, with the overall performance indicating long position reduction.

[SMM Copper Morning Meeting Minutes] News: (1) Investors' concerns about the unpredictability of US policy are deepening, with the US dollar falling to its lowest level against major currencies in four years. However, US President Trump is not worried. He said on Tuesday that the dollar is performing well, he is not worried about its decline, and he expects exchange rate fluctuations. Trump hinted that he could manipulate the dollar exchange rate, saying, "I can make it go up and down like a yo-yo." But he believes doing so is not a good thing, comparing it to hiring unnecessary employees to improve employment data, while criticizing some Asian economies he believes are trying to devalue their currencies. Although Trump appears unconcerned about the dollar's depreciation, commentary suggests the dollar's decline is not over. In the long term, structural factors such as Fed independence, widening budget deficits, concerns related to fiscal profligacy, and political polarization are putting downward pressure on the dollar.

Spot: (1) Shanghai: On the morning of January 27, the SHFE copper 2602 contract opened lower with a gap and showed a volatile downward trend. It opened with a quick gap down and probed lower, then rebounded slightly briefly, before weakening and falling again, touching a low of 101,610 yuan/mt, then fluctuating between 101,860 yuan/mt and 102,200 yuan/mt, closing at 101,880 yuan/mt. The Contango spread between the front-month and next-month contracts ranged from 340 yuan/mt to 270 yuan/mt. The import loss for the front-month SHFE copper contract was between 610-730 yuan/mt. Looking ahead to today, the inhibitory effect of high copper prices on downstream consumption continues to appear, leading to weak consumption and consequently domestic inventory accumulation. High inventory continues to widen the inter-month spread, enhancing suppliers' willingness to ship to delivery warehouses, thereby suppressing spot market liquidity and buying enthusiasm, making it difficult for spot discounts to recover. Although downstream buying the dip exists, its scale is insufficient to reverse the overall discount pattern. Therefore, spot discounts for SHFE copper are expected to remain under pressure. (

2) Guangdong: On January 27, spot #1 copper cathode in Guangdong was at a discount of 350-120 yuan/mt against the front-month contract, with an average discount of 235 yuan/mt, down 25 yuan/mt from the previous trading day; SX-EW copper was reported at a discount of 410-390 yuan/mt, with an average discount of 400 yuan/mt, down 50 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 101,505 yuan/mt, down 1,155 yuan/mt from the previous trading day. The average price of SX-EW copper was 101,340 yuan/mt, down 1,180 yuan/mt from the previous trading day. Overall, although inventory continued to decline, suppliers were eager to sell, causing spot premiums to continue falling.

(3) Imported copper: On January 27, warrant prices were $15-29/mt, QP February, with the average price flat from the previous trading day; B/L prices were $17-27/mt, QP February, with the average price flat from the previous trading day; EQ copper (CIF B/L) was at -$16/mt to -$6/mt, QP February, with the average price flat from the previous trading day. Quotations referred to cargoes arriving in mid-to-late January and early February.

(4) Secondary copper: Today's futures closing price at 11:30 was 101,680 yuan/mt, down 600 yuan/mt from the previous trading day. The average spot premium/discount was -265 yuan/mt, down 35 yuan/mt from the previous trading day. Today's copper scrap price fell 500 yuan/mt MoM. The price of bare bright copper in Guangdong was 90,200-90,400 yuan/mt, down 500 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 2,726 yuan/mt, down 89 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,335 yuan/mt. According to the SMM survey, since New Year's Day, enterprises in various regions have encountered problems to varying degrees during inspections related to "reverse invoicing." After rectification, to avoid subsequent issues with related invoices, enterprises have chosen to procure copper scrap with VAT invoices. Additionally, after annual long-term contracts for scrap-derived copper anode were finalized, procurement of copper scrap with VAT invoices is also required. Therefore, there is an undersupply of anode material in Ningbo Zhenhai.

Prices: On the macro front, the US Fed paused interest rate cuts and the subsequent path remains unclear, coupled with uncertainty from US geopolitical actions in Iran and Venezuela, leading some market bulls to take profits. Trading focus is on the upcoming Fed interest rate decision. Fundamentally, on the supply side, the spot market entered month-end, and some suppliers had needs to sell for cash, making supply relatively ample. Demand side, only maintaining a cautious strategy of buying the dip, overall demand support is limited. In summary, under the combined effect of weakening macro sentiment, capital outflows, and loose spot supply, copper prices face short-term adjustment pressure. However, considering there is still some consumer buying at low levels, copper prices are expected to find support below 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 independent judgment. Any decisions made by clients are unrelated to SMM.]