Mitsubishi in Japan Halted Copper Smelting Operations; Overnight, Both LME Copper and SHFE Copper Closed Higher [SMM Copper Morning Meeting Summary]

Thursday, March 26, 2026
Futures: Overnight, LME copper opened at $12,257/mt. After dipping to $12,208/mt in early trading, its center fluctuated upward and reached a high of $12,383/mt, then hovered at highs and finally closed at $12,283/mt, up 1.58%. Trading volume reached 23,000 lots, open interest stood at 296,000 lots, up 3,418 lots from the previous trading day, mainly reflecting increased long positions. Overnight, the most-traded SHFE copper 2605 contract opened at 95,950 yuan/mt, dipped to 95,530 yuan/mt in early trading, then moved higher to a high of 96,580 yuan/mt. Copper prices subsequently moved lower in center and finally closed at 96,250 yuan/mt, up 1.11%. Trading volume reached 51,000 lots, open interest stood at 190,000 lots, down 2,036 lots from the previous trading day, mainly reflecting reduced short positions.
[SMM Copper Morning Meeting Summary] News:
(1) On Wednesday, March 25, Mitsubishi Materials said it had decided to cease copper concentrates processing at its Onahama smelter and refinery, as well as the operation of related smelting facilities, by the end of March 2027. In a statement, the company said the outlook for the relevant business had become increasingly uncertain due to intensified competition from overseas smelters and a sharp decline in treatment and refining charges (TC/RCs) for copper concentrates. The company also said in a statement that it expected to book an asset impairment loss of 21 billion yen in Q4 of the current fiscal year ending this month, mainly related to the smelter's fixed assets. Treatment and refining charges are fees paid by miners to smelt concentrates into refined metal. As smelting capacity expanded, treatment and refining charges came under pressure, squeezing smelters' profit margins. Although the Onahama smelter had been striving to maintain profitability through measures such as suspending some processing operations, reducing concentrate processing, and cutting costs, Mitsubishi Materials still decided, as part of structural reform, to halt concentrate processing at the smelter and the operation of related smelting equipment. The electrolysis plant will continue refining copper anode and anodes derived from scrap. Other facilities, including a platinum group metals recycling plant and a foundry producing copper ingot, will also continue operating. Japanese copper smelters are currently facing the ongoing decline in treatment and refining charges and continuously shrinking smelting profits.
Spot:
(1) Shanghai: On the morning of March 25, the SHFE copper 2604 contract opened sharply higher and, after continuing to climb, dropped back slightly. It opened at 94,590 yuan/mt, then jumped to 95,890 yuan/mt after the opening, continued rising to a high of 96,260 yuan/mt, and then pulled back to fluctuate between 95,500 yuan/mt and 95,800 yuan/mt, with a closing price of 95,500 yuan/mt. The price spread between futures contracts for nearby months was between a contango of 20 yuan/mt and a backwardation of 20 yuan/mt, while the import profit margin for the front-month SHFE copper contract ranged from a profit of 150 yuan/mt to a profit of 240 yuan/mt. Looking ahead to today, the Shanghai spot copper market is expected to remain under pressure. After the sharp jump in copper prices, downstream procurement sentiment pulled back, indicating limited acceptance of current price levels. From the market structure perspective, suppliers showed strong willingness to sell, with some brands continuing to offload cargo, putting pressure on discounts. Downstream players mostly maintained a wait-and-see stance, with procurement mainly driven by rigid demand and purchases on dips. It is worth noting that the price spread between high-quality copper and standard-quality copper narrowed somewhat from earlier levels, indicating that the market trading structure has become more rational, with actual consumption demand becoming the dominant force at the current stage. Overall, amid the tug-of-war between active selling by suppliers and cautious downstream procurement, Shanghai spot copper prices against the 2604 contract are expected to maintain the current discount level today.
(2) Guangdong: On March 25, Guangdong #1 copper cathode spot prices against the front-month contract were quoted at a premium of 100 yuan/mt for high-quality copper, up 30 yuan/mt from the previous trading day; a discount of 10 yuan/mt for standard-quality copper, up 20 yuan/mt from the previous trading day; and a discount of 70 yuan/mt for SX-EW copper, up 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 95,785 yuan/mt, up 1,755 yuan/mt from the previous trading day, while the average price of SX-EW copper was 95,670 yuan/mt, up 1,750 yuan/mt from the previous trading day. Overall, inventory fell for seven consecutive sessions, suppliers actively held prices firm, spot premiums moved higher, and overall trading was moderate.
(3) Imported copper: On March 25, the average warrant price was up $17/mt from the previous trading day at $69/mt (price range: $62-76/mt); the average B/L price was up 14 from the previous trading day at $67/mt (price range: $60-74/mt); the average price of EQ copper (CIF B/L) was up 9 from the previous trading day at $39/mt (price range: $32-44/mt), with quotations referring to cargoes arriving in mid-to-early April.
(4) Secondary copper: As of 11:30 on March 25, the futures closing price was 95,500 yuan/mt, up 1,490 yuan/mt from the previous trading day; the average spot premiums were -85 yuan/mt, down 10 yuan/mt from the previous trading day. On March 25, copper scrap prices rose 500 yuan/mt MoM, the sales sentiment index for copper scrap rose to 2.32, the purchase sentiment index rose to 2.39, and the price difference between copper cathode and copper scrap was 971 yuan/mt, up 925 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 990 yuan/mt. According to the SMM survey, copper scrap traders in the market believed that copper prices retreated after a rapid rise in early trading, and still had downside room afterward. Intraday copper scrap quotations did not rise as much as copper cathode prices, and transactions were average.
Prices: On the macro front, the US continuously released signals of negotiations and proposed a 15-point solution to Iran to end the conflict. Although Iran denied direct talks, market expectations for the conflict recovered. Coupled with optimistic expectations for consumption as the peak season approached, this jointly pushed copper prices higher. Fundamentally, supply side, under the current price spread between futures contracts structure, suppliers showed strong willingness to sell, and spot cargo circulation in the market was ample; demand side, the rebound in copper prices suppressed downstream purchase willingness. Overall, copper prices are expected to fluctuate rangebound at high levels today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not use this in place of their own independent judgment. Any decisions made by clients are unrelated to SMM.]