Peru's Energy Crisis Drives Copper Prices Higher, Fundamentals Under Pressure with Sluggish Consumption [SMM Copper Morning Meeting Minutes]

2026.5.13 Wednesday
Futures: Overnight, LME copper opened at $13,958.5/mt, fluctuated downward in early trading to touch $13,901/mt, then the price center gradually shifted upward to reach $14,106.5/mt before swinging wildly, ultimately closing at $14,080/mt, up 1.15%. Trading volume reached 25,800 lots, and open interest stood at 273,000 lots, up 1,127 lots from the previous trading day, indicating bulls adding positions. Overnight, the most-traded SHFE copper 2606 contract opened at 107,000 yuan/mt, edged down in early trading to touch 106,840 yuan/mt, then the price center fluctuated upward to reach 109,470 yuan/mt, before gradually shifting downward to ultimately close at 107,720 yuan/mt, up 0.93%. Trading volume reached 84,300 lots, and open interest stood at 205,000 lots, down 1,769 lots from the previous trading day, indicating bears reducing positions.
[SMM Copper Morning Meeting Summary] News:
(1) On May 11 (Monday), gold and copper miner Barrick reported that its Lumwana super copper mine expansion project in Zambia continued to advance on schedule and on budget in Q1. Capital expenditure for 2026 is expected to be at the low-end of the $750–850 million guidance range, with total project capital estimated at $2 billion. The expansion project is expected to produce its first copper by the end of Q1 2028. Overall, the company's Q1 copper production was 49,000 mt, up 11% QoQ, in line with expectations.
Spot:
(1) Shanghai: On May 12, SHFE copper 2605 showed a fluctuating trend of moving sideways. The opening price was 107,200 yuan/mt, after which prices edged down, ranging between 106,650 yuan/mt and 107,100 yuan/mt. Copper prices then continued to decline, touching a low of 106,310 yuan/mt before stabilizing and rebounding somewhat, with a closing price of 106,850 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 90 yuan/mt to 30 yuan/mt. The import profit margin for SHFE copper against the 2605 front-month contract ranged from a loss of 270 yuan/mt to a loss of 190 yuan/mt. According to SMM, downstream orders dropped sharply during the day, with purchasing sentiment subdued and dominated by rigid demand. Market performance showed that suppliers continuously lowered their offers, and spot prices shifted from premiums to discounts, with the discount widening. However, as Friday marks the last trading day for the SHFE copper 2605 contract, with delivery approaching, spot discounts are widening under the Contango price spread structure, strengthening suppliers' willingness to ship to delivery warehouses. Delivery logic is expected to provide floor support for spot discounts, limiting further downside.
(2) Guangdong: On May 12, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 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, with copper prices hitting new highs, downstream buyers were reluctant to restock, and overall trading activity was poor.
(3) Imported copper: On May 12, the average warrant price rose $1/mt from the previous trading day to $70/mt (price range $66-74/mt); the average B/L price rose $1/mt from the previous trading day to $67/mt (price range $65-71/mt); the average EQ copper (CIF B/L) price rose $2/mt from the previous trading day to $38/mt (price range $36-44/mt), with quotes referencing cargoes arriving in mid-to-late May. Copper prices surged significantly during the day, market activity was limited but a small volume of transactions still occurred. Sellers' offers remained firm, and low-priced warrant and B/L cargoes were scarce.
(4) Secondary copper: On May 12, copper scrap prices rose 1,200 yuan/mt MoM, the copper scrap sales sentiment index rose to 2.71, the procurement sentiment index fell to 2.09, the price difference between copper cathode and copper scrap was 3,580 yuan/mt, up 749 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,990 yuan/mt. According to an SMM survey, as copper prices continued to climb, a large number of copper scrap suppliers had a strong willingness to sell. However, secondary copper rod enterprises across China operated at limited capacity, and copper scrap traders' delivery destinations were relatively concentrated, leading to extended unloading times. This caused a significant accumulation of copper scrap at copper scrap traders' and secondary copper rod enterprises' warehouses, and copper scrap social inventory rose notably.
Prices: On the macro front, US April CPI rose to 3.8% YoY, exceeding expectations, with energy contributing 40% of the increase; US Fed's Goolsbee said inflation was disappointing, Waller was confirmed as a governor, and the market priced in approximately 10 basis points of rate hikes before year-end. On the Iran front, the US said the ceasefire remained in effect and had an escalation plan in place, and planned to rename the war to circumvent authorization time limits; Iran demanded an end to hostilities and the lifting of the blockade first, and the UK will deploy forces to the Strait of Hormuz. In addition, expectations for SX-EW copper production cuts due to sulfur shortages, mine production resumptions falling short of expectations, and Peru's emergency decree collectively intensified market concerns over supply, driving copper prices to rise. Fundamentals side, as China approached the delivery month, suppliers' willingness to ship to delivery warehouses increased, and the spot cargo market remained generally tight; demand side, persistently high copper prices continued to suppress downstream willingness to take orders, and just-in-time procurement in the market was weak. Overall, copper prices are expected to maintain 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 prudent decisions and not use this as a substitute for independent judgment. Any decisions made by clients are not related to SMM.]