Grasberg Mine to Resume Production by the End of 2027, LME Copper and SHFE Copper Closed Sharply Higher Overnight [SMM Copper Morning Meeting Minutes]

2026.5.12 Tuesday
Futures: Overnight, LME copper opened at and dipped below $13,693.5/mt. It moved sideways at the start of the session, then the price center fluctuated upward, approaching the end of the session to touch $13,969/mt, before fluctuating downward to finally close at $13,920/mt, up 2.84%. Trading volume reached 26,800 lots, and open interest reached 272,000 lots, an increase of 1,201 lots from the previous trading day, indicating bulls adding positions. Overnight, the most-traded SHFE copper 2606 contract opened at 105,500 yuan/mt, dipping to 105,390 yuan/mt at the start of the session. The price center then gradually shifted upward, touching a high of 107,350 yuan/mt near the end of the session, before fluctuating downward to finally close at 106,770 yuan/mt, up 2.35%. Trading volume reached 75,900 lots, and open interest reached 209,000 lots, an increase of 4,829 lots from the previous trading day, indicating bulls adding positions.
[SMM Copper Morning Meeting Summary] News:
(1) Freeport-McMoRan said on Monday that it still expected the Grasberg copper-gold mine in Indonesia to fully resume production by the end of 2027, reaffirming the plan outlined last month and refuting reports that production resumptions could be delayed to 2028. Grasberg is the world's second-largest copper mine and the largest gold mine. Last September, the mine suffered an accident that disrupted operations for nearly a month. In late April, Freeport said recovery work at the mine was taking longer than expected and postponed its forecast of restoring 85% capacity in H2 this year, saying it now expected to restore only 65% of capacity. Freeport executives said full operations would be restored by the end of 2027.
Spot:
(1) Shanghai: During the morning session on May 11, SHFE copper 2605 contract moved sideways before edging higher. The opening price was 104,250 yuan/mt. After opening, prices fluctuated between 104,000 yuan/mt and 104,400 yuan/mt, then edged higher to touch 104,730 yuan/mt, with a closing price of 104,680 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 70 yuan/mt to 20 yuan/mt. The SHFE copper import profit margin against the 2605 contract for the current month ranged from a loss of 250 yuan/mt to a loss of 200 yuan/mt. Looking ahead to today, suppliers continuously lowered their offers intraday, with the premium center pulling back from around a premium of 50 yuan/mt in the morning to near parity, with some brands even showing slight discounts, reflecting limited downstream acceptance of high copper prices, with procurement driven mainly by rigid demand and insufficient willingness to chase higher prices. The inter-month Contango price spread between futures contracts narrowed, and suppliers' willingness to ship to delivery warehouses weakened somewhat. This Friday is the last trading day for the SHFE copper 2605 contract, and delivery logic is gradually emerging, which will provide bottom support for spot premiums and limit further significant downside room for premiums. Overall, Shanghai spot copper prices against the 2605 contract are expected to maintain current levels today, continuing weak consolidation, but downside room is limited under delivery expectations.
(2) Guangdong: On May 11, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 260 yuan/mt, down 30 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 190 yuan/mt, down 30 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 120 yuan/mt, down 30 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 104,355 yuan/mt, up 1,385 yuan/mt from the previous trading day; the average price of SX-EW copper was 104,325 yuan/mt, up 1,395 yuan/mt from the previous trading day. Overall, copper prices surged sharply while consumption remained weak. Suppliers actively adjusted prices to facilitate shipments, and overall trading activity was moderate.
(3) Imported copper: On May 11, the average warrant price fell $1/mt from the previous trading day to $69/mt (price range $64-74/mt); the average B/L price fell $1/mt from the previous trading day to $66/mt (price range $63-71/mt); the average EQ copper (CIF B/L) price was flat from the previous trading day at $36/mt (price range $32-42/mt), with quotes referencing cargoes arriving in mid-to-late May.
(4) Secondary copper: On May 11 at 11:30, the futures closing price was 104,680 yuan/mt, up 1,910 yuan/mt from the previous trading day. The average spot premium was 50 yuan/mt, down 10 yuan/mt from the previous trading day. On May 11, copper scrap prices rose 500 yuan/mt MoM. The copper scrap sales sentiment index rose to 2.63, and the purchase sentiment index rose to 2.23. The price difference between copper cathode and copper scrap was 2,831 yuan/mt, up 1,342 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,780 yuan/mt. According to an SMM survey, while copper prices rose steadily, the copper scrap market showed divergence. Northern secondary copper rod enterprises implementing reverse invoicing had significantly faster payment cycles compared to southern enterprises. As a result, many southern copper scrap yards, facing extended payment cycles when purchasing, had to pass the funding costs on to upstream suppliers, pushing prices down to varying degrees. Consequently, bare bright copper prices in south China were generally 400-600 yuan/mt lower than purchase prices in the north.
Prices: On the macro front, Iran deployed deep-diving submarines in the Strait of Hormuz, and Trump stated he might restart "Operation Freedom" if necessary. Additionally, according to US media reports from early April, the UAE had conducted airstrikes on Iranian refineries. On the other hand, Peru, the world's third-largest silver producer and ninth-largest gold producer, issued an emergency energy crisis decree on Monday, sparking market concerns over mineral supply disruptions and driving copper prices sharply higher. Fundamentals side, supply side, imported copper arrivals increased in the short term, but domestic supply arrivals remained tight, with overall supply still tight. Demand side, affected by the continued rise in copper prices, downstream purchase willingness was suppressed, and consumption performance was moderate. Inventory side, as of Monday May 11, SMM copper inventories in major regions nationwide decreased by 10,300 mt WoW from the post-holiday level to 242,600 mt, with total inventories up 119,500 mt compared to the same period last year at 123,100 mt. Overall, supply-side concerns combined with the warmer sentiment brought by Trump's imminent visit to China suggest that copper prices are expected to stay high with a fluctuating trend and move sideways 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 not replace their own independent judgment with this information. Any decisions made by clients are not related to SMM.]