Chile's Copper Ore Production Remains Sluggish, LME Copper Rebounds Sharply Overnight While SHFE Copper Edges Up [SMM Copper Morning Meeting Minutes]

Wednesday, February 25, 2026
Futures: LME copper opened at $13,055/mt overnight. It hit a low of $13,052.5/mt at the beginning of the session, then the center of copper prices fluctuated upward, reaching a high of $13,228/mt near the end of the session, and finally closed at $13,195/mt, up 2.28%. Trading volume reached 26,000 lots, an increase of 13,977 lots from the previous trading day; open interest was 317,000 lots, a decrease of 1,210 lots from the previous trading day, with the overall performance mainly characterized by short covering. The most-traded SHFE copper contract 2603 opened at 101,650 yuan/mt overnight. It hit a high of 102,230 yuan/mt at the beginning of the session, then the center moved down to hit a bottom of 101,200 yuan/mt, and finally fluctuated rangebound to close at 101,860 yuan/mt, up 0.25%. Trading volume reached 29,000 lots, a decrease of 42,000 lots from the previous trading day; open interest was 123,000 lots, a decrease of 7,789 lots from the previous trading day, with the overall performance mainly characterized by short covering.
[SMM Copper Morning Meeting Minutes] News:
(1) Chile's state-owned Codelco expects production at its largest copper mine, El Teniente, to remain at the current low level in the coming years, as the state-owned enterprise grapples with the ongoing effects of Chile's worst mining disaster in decades. An official from the company recently stated that annual production at the El Teniente mine may remain around 300,000 mt until the end of this decade. This is lower than the approximately 356,000 mt produced in 2024. A rock burst in July, which killed six people, forced the company to reconsider its mining plans in deeper areas of the mine. The prospect of stagnant production at this giant underground mine highlights the current tight supply situation, which is one of the factors driving copper prices to record highs. Major mines in Indonesia and the DRC are also recovering from severe production disruptions, while the entire industry generally faces the challenge of declining ore quality amid growing demand for the wire metal driven by electrification.
Spot:
(1) Shanghai: On February 24, SMM's #1 copper cathode spot prices against the current month 2602 contract were quoted at a premium of 120-380 yuan/mt, with an average premium of 250 yuan/mt, up 250 yuan/mt from the previous trading day; the SMM #1 copper cathode price range was 100,830-102,080 yuan/mt. In the morning session, SHFE copper futures continued to rise, during which the price spread between the SHFE copper 2602 and 2603 contracts changed frequently, fluctuating between Contango 500 and Contango 360 yuan/mt. The import loss for the current month's SHFE copper contract was around 500 yuan/mt. Imported cargoes arrived in full during the holiday period, and this trend is expected to continue. Looking ahead to today, inventory in the Shanghai area increased significantly by over 80,000 mt during the holiday, with domestic material mainly existing in the form of futures warrants, and imported supplies continuing to supplement the market. Spot prices are expected to be at a discount this week.
(2) Guangdong: On February 24, spot prices of #1 copper cathode in Guangdong against the front-month contract were at a discount of 300 yuan/mt to a premium of 0 yuan/mt, with the average discount at 150 yuan/mt, down 110 yuan/mt from the pre-holiday level. SX-EW copper was quoted at a discount of 380-340 yuan/mt, with the average discount at 360 yuan/mt, down 200 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 100,925 yuan/mt, up 735 yuan/mt from the previous trading day, while the average price of SX-EW copper was 100,715 yuan/mt, up 645 yuan/mt from the previous trading day. Overall, the significant inventory buildup prompted some suppliers to urgently offload cargoes, actively lowering prices and driving spot premiums lower, with overall trading activity remaining sluggish.
(3) Imported Copper: On February 24, warrant prices were $45-51/mt, QP March, with the average price up $20/mt from the previous trading day; B/L prices were $42-56/mt, QP March, with the average price up $14/mt from the previous trading day; EQ copper (CIF B/L) was $15-25/mt, QP March, with the average price up $4/mt from the previous trading day. Quotations referred to cargoes arriving in late February and early March.
(4) Secondary Copper: At 11:30 on February 24, the futures closing price was 101,700 yuan/mt, up 1,300 yuan/mt from the previous trading day, while the average spot premiums/discounts were 250 yuan/mt, up 250 yuan/mt from the previous trading day. On February 24, copper scrap prices rose 1,200 yuan/mt MoM, with bare bright copper prices in Guangdong at 89,700-89,900 yuan/mt, up 1,200 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 3,269 yuan/mt, up 232 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,470 yuan/mt. According to the SMM survey, post-holiday production resumptions showed that copper scrap traders gradually resumed operations, while most copper scrap yards and secondary copper rod enterprises would see workers returning starting from February 26 at the earliest, with the latest resumptions not exceeding the Lantern Festival.
Prices: On the macro front, the US Supreme Court ruled large-scale tariff hikes illegal, easing market risk-off sentiment. Consequently, the US dollar index fell, providing tailwinds for copper prices. On the fundamentals side, supply saw continuous replenishment from imported cargoes, while domestic supply was mainly in the form of warrants, leading to overall loose supply. Demand side, trading sentiment was mediocre on the first trading day, resulting in a supply-strength-demand-weakness fundamental pattern. Inventory side, as of February 24, SMM copper inventories in mainstream regions across China increased 43.81% WoW from the pre-holiday level, hitting a five-year high. Overall, macro tailwinds provided momentum, but substantial inventory buildup on the fundamentals side exerted pressure. Amid a tug-of-war between longs and shorts, copper prices were expected to maintain a fluctuating trend 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.]