Shuka Mining Launches Drilling in Zambia; Overnight LME Copper and SHFE Copper Both Closed Lower [SMM Copper Morning Meeting Minutes]

2026.5.20 Wednesday
Futures: Overnight, LME copper opened at $13,489/mt, initially rising to $13,533.5/mt before the price center gradually shifted lower to $13,386/mt, ultimately closing at $13,427/mt, down 1.2%, with trading volume at 20,000 lots and open interest at 277,000 lots, down 6,463 lots from the previous trading day, indicating bulls reducing positions. Overnight, the most-traded SHFE copper 2606 contract opened at 104,130 yuan/mt, initially touching a high of 104,170 yuan/mt before the price center shifted lower to a low of 103,390 yuan/mt, ultimately moving sideways to close at 103,670 yuan/mt, down 0.82%, with trading volume at 31,000 lots and open interest at 143,000 lots, down 4,124 lots from the previous trading day, indicating bulls reducing positions.
[SMM Copper Morning Meeting Summary] News:
(1) According to Miningweekly, Shuka Minerals has commenced Phase 1 drilling at Orebody No. 2 of the Kabwe zinc mine in Zambia. Orebody No. 2 remains uncontrolled at depth, with initial diamond drilling at an angle of 65°, designed to verify the orebody below existing workings at a depth of 220 to 230 meters. Orebody No. 2 contains silver, vanadium, gallium, and germanium ore, but these have never previously been the focus of exploration and testing. Shuka plans to carry out further work, and the plan being executed will evaluate the potential of these minerals.
Spot:
(1) Shanghai: On May 19, SMM #1 copper cathode spot prices against the current-month 2606 contract were quoted at a discount of 100 yuan/mt to a discount of 20 yuan/mt, with an average discount of 60 yuan/mt. In the morning session, the SHFE copper 2606 contract retreated after a rapid rise and then fell sharply. The opening price was 104,650 yuan/mt. After opening, prices edged up to 104,850 yuan/mt before pulling back to 104,550 yuan/mt. Prices then surged again to a high of 104,940 yuan/mt before pulling back rapidly to 104,100 yuan/mt. Prices continued to decline, reaching a low of 103,870 yuan/mt, trading between 103,870 yuan/mt and 104,000 yuan/mt, with a closing price of 103,940 yuan/mt. The inter-month Contango price spread between futures contracts ranged from 60 yuan/mt to 10 yuan/mt. The SHFE copper import profit margin against the 2606 contract for the current month ranged from a loss of 340 yuan/mt to a loss of 280 yuan/mt. Looking ahead, intraday SHFE copper prices retreated after a rapid rise, but absolute prices remained elevated, continuing to suppress spot premiums. Suppliers further lowered their offers during the second trading session, and Shanghai spot copper premiums continued to widen their discounts. Downstream buyers only made just-in-time procurement, with limited willingness to chase higher prices. Some suppliers had invoicing needs and made purchases in the market, providing some support to spot discounts. Overall, Shanghai spot copper prices against the 2606 contract are expected to remain at a discount today.
(2) Guangdong: On May 19, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 270 yuan/mt, up 10 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 200 yuan/mt, up 20 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 130 yuan/mt, up 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 104,715 yuan/mt, up 480 yuan/mt from the previous trading day; the average price of SX-EW copper was 104,610 yuan/mt, up 450 yuan/mt from the previous trading day. Overall, high premiums and high copper prices dampened end-user restocking willingness, and trading activity remained subdued.
(3) Imported copper: On May 19, the average warrant price fell $1/mt from the previous trading day to $72/mt (price range: $68-76/mt); the average B/L price fell $1/mt from the previous trading day to $71/mt (price range: $66-76/mt); the average EQ copper (CIF B/L) price fell $1/mt from the previous trading day to $41/mt (price range: $38-44/mt). Quotes were based on cargoes arriving in mid-to-late May and early June.
(4) Secondary copper: On May 19, the futures closing price at 11:30 was 103,940 yuan/mt, down 310 yuan/mt from the previous trading day. The average spot premium was -60 yuan/mt, down 15 yuan/mt from the previous trading day. On May 19, copper scrap prices remained unchanged MoM. The copper scrap sales sentiment index stayed flat at 2.7, while the purchasing sentiment index rose to 2.29. The price difference between copper cathode and copper scrap was 2,651 yuan/mt, down 325 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,140 yuan/mt. According to an SMM survey, as copper prices stopped falling and rebounded, many secondary copper rod enterprises actively sought low-priced sources in the market. Only a few copper scrap traders sold off low-priced historical inventory, and intraday copper scrap transactions were moderate.
Prices: On the macro front, the prospects for US-Iran negotiations remained uncertain, with Iran insisting on its core demands and Trump signaling a possible renewed strike on Iran. Meanwhile, the market was concerned that the US Fed might turn hawkish to curb inflation, with federal funds rate futures indicating that the probability of a US Fed rate hike within the year would rise to 75%, putting pressure on copper prices. Fundamentals side, supply was affected by concentrated maintenance at smelters, with reduced domestic cargo arrivals and limited imported cargo arrivals, leading to overall tight market supply. Demand side, as copper prices fluctuated at highs, most buyers maintained just-needed purchases, and overall transactions showed no significant recovery. Overall, copper prices are expected to continue a fluctuating trend 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.]