Rio Tinto and Glencore Plan to Extend Negotiations, LME Copper Fell Sharply Last Friday [SMM Copper Morning Meeting Minutes]

February 2, 2026, Monday
Futures: On last Friday, LME copper opened at $13,230/mt, hitting a high of $13,481.5/mt in early trading. Subsequently, the center of copper prices fluctuated downward, reaching a low of $12,845/mt near the close, and ultimately settled at $13,070.5/mt, marking a 4.63% decline. Trading volume reached 29,000 lots, an increase of 2,143 lots from the previous trading day, while open interest stood at 330,000 lots, a decrease of 1,761 lots from the previous trading day, primarily reflecting bulls reducing their positions. On the evening of last Friday, the most-traded SHFE copper 2603 contract opened at 104,200 yuan/mt, maintained a narrow rangebound fluctuation in early trading, and then hit a high of 105,080 yuan/mt. Subsequently, the center fluctuated downward, reaching a low of 102,700 yuan/mt near the close, and ultimately settled at 103,190 yuan/mt, marking a 4.75% decline. Trading volume reached 183,000 lots, a decrease of 603,000 lots from the previous trading day, while open interest stood at 219,000 lots, a decrease of 4,081 lots from the previous trading day, primarily reflecting bulls reducing their positions.
[SMM Copper Morning Meeting Summary] News:
(1) On January 28, Glencore's copper production in Q4 2025 was 268,100 mt, up 8.8% YoY and up 11.9% MoM. Its copper production in 2025 was 851,600 mt, down 11% YoY.
(2) On January 30, Rio Tinto and Glencore are planning to apply to regulatory authorities for an extension of the merger negotiation deadline. Due to ongoing disagreements over valuation premiums, the original deadline of February 5 is expected to be postponed. If this "merger of the century" is concluded, it will create the world's largest mining giant with a market value of approximately $235 billion, focusing on copper mine assets and synergies. Currently, both parties are deeply negotiating core valuation details and future strategic integration.
Spot:
(1) Shanghai: On the morning of January 30, the SHFE copper 2602 contract showed a trend of rebounding after an initial decline, rising slightly after opening and hitting a high of 108,940 yuan/mt, then began to decline, reaching a low of 102,820 yuan/mt twice, and then gradually stabilized, fluctuating between 103,500 yuan/mt and 104,600 yuan/mt, and finally closed at 104,330 yuan/mt. The Contango price spread between futures contracts ranged between 430 yuan/mt and 280 yuan/mt, while the import profit margin for the most-traded SHFE copper contract fluctuated between a loss of 340 yuan/mt and a profit of 200 yuan/mt. Looking ahead to this week, the Shanghai spot copper market is expected to remain under pressure. Although copper prices have retreated from historical highs during the day, they remain at elevated levels, continuing to suppress actual downstream procurement demand and failing to provide effective support for spot prices. In terms of market structure, the import window is fluctuating near the break-even point. If it continues to open, it will introduce overseas supply, increasing domestic supply pressure. Meanwhile, although the Contango price spread between futures contracts has narrowed slightly, suppliers' willingness to ship to delivery warehouse remains strong, continuing to divert tradable spot supplies. If copper prices fail to decline further this week to effectively stimulate buying interest, the market will continue to exhibit a pattern of "high prices and weak trading volumes."
(2) Guangdong: On January 30, spot prices of #1 copper cathode in Guangdong against the front-month contract were at a discount of 320-120 yuan/mt, with the average discount at 220 yuan/mt, up 15 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 380-360 yuan/mt, with the average discount at 370 yuan/mt, up 30 yuan/mt from the previous day. The average price of #1 copper cathode in Guangdong was 105,840 yuan/mt, up 3,195 yuan/mt from the previous day, while the average price of SX-EW copper was 105,690 yuan/mt, up 3,210 yuan/mt. Overall, copper prices retreated from highs, but consumption remained weak, and overall trading was inactive.
(3) Imported Copper: On January 30, warrant prices were $20-34/mt, QP February, with the average price up $4/mt from the previous trading day; B/L prices were $22-34/mt, QP February, with the average price up $5/mt from the previous day. EQ copper (CIF B/L) was quoted at -$8/mt to $10/mt, QP February, with the average price up $6/mt from the previous day. Quotations referred to cargoes arriving in the first half of February.
(4) Secondary Copper: At 11:30 on January 30, the futures closing price was 104,330 yuan/mt, down 3,900 yuan/mt from the previous trading day. The average spot premium/discount was -150 yuan/mt, up 20 yuan/mt from the previous day. Today, copper scrap prices fell 800 yuan/mt MoM. The price of bare bright copper in Guangdong was 91,400-91,600 yuan/mt, down 800 yuan/mt from the previous day. The price difference between copper cathode and copper scrap was 3,631 yuan/mt, down 3,000 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 2,090 yuan/mt. According to the SMM survey, traders of imported copper scrap indicated that, given the current robust demand for copper scrap containing VAT, imports of copper scrap would continue to grow in January. For February, considering the Chinese New Year holiday, a decline in port arrivals is expected.
Price: On the macro front, Trump announced Wash as the next Fed Chairman, cooling expectations for US Fed interest rate cuts and strengthening the US dollar index, which suppressed copper prices. Additionally, bulls took profits, and prices of precious metals like gold and silver pulled back, also exerting downward pressure on copper prices. On the fundamentals side, imported cargoes continued to arrive, and domestic supply remained stable, resulting in an overall loose supply pattern. Demand side, copper prices fluctuating at highs continued to dampen downstream purchasing sentiment, with overall consumption performing weakly. In summary, copper prices are expected to encounter resistance 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.]