Codelco’s Warning Cost Was Boosted by the Middle East Situation; Overnight, SHFE Copper Bulls Reduced Positions and Closed Lower [SMM Copper Morning Meeting Summary]

Monday, March 30, 2026
Futures: Last Friday night, LME copper opened at $12,157.5/mt and dipped to $12,106/mt at the start of the session, then fluctuated upward to a high of $12,246.5/mt. Later, the center of copper prices gradually moved lower and finally closed at $12,141/mt, up 0.17%. Trading volume reached 15,500 lots, and open interest stood at 295,000 lots, down 991 lots from the previous trading day. Last Friday night, the most-traded SHFE copper 2605 contract opened at 95,080 yuan/mt and touched a low of 95,040 yuan/mt at the start of the session. Then, the center of copper prices gradually moved higher to 95,880 yuan/mt, before fluctuating downward and finally closing at 95,490 yuan/mt, down 0.22%. Trading volume reached 42,900 lots, and open interest stood at 185,500 lots, down 1,897 lots from the previous trading day, mainly due to long liquidation.
[SMM Copper Morning Meeting Summary] News:
(1) On March 27 (Friday), Codelco estimated that supply disruptions caused by the Middle East conflict would raise its production costs by about 5%, marking the first time a major mining company had provided a quantified inflation estimate. CFO Alejandro Sanhueza said that rising diesel prices, higher raw material costs, and the Chilean government's proposed suspension of the fuel tax rebate policy would together increase Codelco's cash cost by about 10¢/lb. At present, its production cost is about $2/lb. "We are closely monitoring this situation," Sanhueza said at the earnings conference. "Although we have not yet been directly affected by the situation in the Middle East, we are still affected by fluctuations in international prices."
Spot:
(1) Shanghai: On March 27, the SHFE copper 2604 contract showed a pattern of wide fluctuations followed by a sharp rise in the morning session. It opened at 95,160 yuan/mt. After the opening, prices fluctuated between 95,090 yuan/mt and 95,360 yuan/mt at lower levels, then rose rapidly to 95,560 yuan/mt, continued climbing, and touched a high of 95,790 yuan/mt, with the closing price at 95,780 yuan/mt. The next-month Contango price spread between futures contracts was in the range of 60 yuan/mt to 10 yuan/mt, while the import profit margin for the front-month SHFE copper contract remained at a loss of 170 yuan/mt to 110 yuan/mt. Looking ahead to this week, the Shanghai spot copper market is expected to remain in a tug-of-war pattern. Supply side, some suppliers had already sold part of their imported cargoes during the day, such as Onsan, SR-P, and Polish large plates, and large volumes of imported copper are still expected to arrive this week, though the actual increase in supply remains to be seen. If copper prices continue to fluctuate rangebound within the current range, the increase in supply will weigh on spot premiums. Demand side, this week will usher in a stockpiling window ahead of the Qingming Festival, and downstream enterprises may have demand to restock in advance. Spot transactions are expected to improve, which may provide temporary support to premiums. In addition, from the market structure perspective, the price spread between high-quality copper and standard-quality copper has remained narrow, reflecting that current market trading is mainly driven by actual consumption demand, with brand premiums weakening and buyers paying more attention to price itself rather than brand differences. Overall, Shanghai spot copper premiums against the 2604 contract are expected to remain at current levels today.
(2) Guangdong: On March 27, Guangdong #1 copper cathode spot prices against the front-month contract were reported at premiums of 150 yuan/mt for high-quality copper, up 30 yuan/mt from the previous trading day; premiums of 50 yuan/mt for standard-quality copper, up 30 yuan/mt from the previous trading day; and a discount of 20 yuan/mt for SX-EW copper, up 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 95,495 yuan/mt, down 130 yuan/mt from the previous trading day, while the average price of SX-EW copper was 95,375 yuan/mt, down 140 yuan/mt from the previous trading day. Overall, inventory fell sharply, suppliers actively held prices firm, and spot premiums continued to rise, with overall trading remaining moderate.
(3) Imported copper: On March 27, the average warrant price fell by $1/mt from the previous trading day to $68/mt (price range: $62-74/mt); the average B/L price fell by $1/mt from the previous trading day to $66/mt (price range: $60-72/mt); and the average EQ copper (CIF B/L) price fell by $1/mt from the previous trading day to $38/mt (price range: $32-42/mt), with quotations referring to cargoes expected to arrive in early to mid-April.
(4) Secondary copper: As of 11:30 on March 27, the futures closing price was 95,780 yuan/mt, up 600 yuan/mt from the previous trading day, while the average spot premiums stood at -95 yuan/mt, up 5 yuan/mt from the previous trading day. On March 27, copper scrap prices remained unchanged MoM, the sales sentiment index for copper scrap rose to 2.35, and the procurement sentiment index rose to 2.37. The price difference between copper cathode and copper scrap was 786 yuan/mt, up 595 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,105 yuan/mt. According to the SMM survey, copper prices retreated after rapid rise intraday, while the copper scrap market showed significant divergence. Market quotations still showed some isolated disorder, suppliers remained sharply divided on bullish and bearish expectations for the outlook, and it was difficult for copper scrap market prices to reach consensus in the short term.
Prices: on the macro front, the Middle East situation remained tense. Iran released satellite images warning of strikes on US military early warning aircraft and attacked a US-linked aluminum plant, while Pakistan planned to promote Iran-US peace talks. The US had more than 50,000 troops stationed in the Middle East, and Houthi forces continued to strike Israeli targets. Although geopolitical conflicts occurred frequently, there was no significant change in the overall macro situation. Coupled with some easing in shipping through the Strait of Hormuz and Iran having allowed vessels from multiple countries to pass, copper prices overall fluctuated rangebound. Fundamentals, imported cargoes continued to arrive, domestic supply remained stable, and overall market supply was ample; demand side, affected by copper prices, downstream enterprises mainly engaged in just-in-time procurement. Overall, copper prices are expected to maintain high-level fluctuate rangebound 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 as a substitute for their own independent judgment. Any decisions made by clients are unrelated to SMM.]