Rising Expectations for US Fed Interest Rate Hikes, Copper Prices Consolidate Amid Bears' Position Reduction and Close Higher [SMM Copper Morning Meeting Minutes]

Wednesday, July 1, 2026
Futures: Overnight, LME copper opened at $13,383.5/mt, swung wildly in early trading and dipped to $13,334/mt, before the center of copper prices shifted straight upward to touch $13,433/mt, then drifted lower to close at $13,380/mt, up 0.27%. Trading volume reached 17,000 lots, and open interest stood at 245,000 lots, down 1,684 lots from the previous trading day, reflecting bear position liquidation. Overnight, the most-traded SHFE copper 2608 contract opened at 102,870 yuan/mt, dipped to 102,640 yuan/mt right after the open, then saw its center shift higher to touch 103,420 yuan/mt, before drifting lower and moving sideways to finally settle at 102,880 yuan/mt, up 0.38%. Trading volume reached 34,000 lots, and open interest stood at 154,000 lots, down 1,382 lots from the previous trading day, reflecting bear position liquidation.
[SMM Copper Morning Brief] News:
(1) Chile's copper production in May fell 12.94% YoY to 423,623 mt, according to data released on Tuesday by the country’s National Statistics Institute (INE). Additionally, NBS data showed Chile's April copper output was 399,954 mt, down 7.9% MoM and 13.81% YoY. This was mainly affected by a high base last year and declining ore grades at major miners.
Spot:
(1) Shanghai: On the morning of June 30, the SHFE copper 2607 contract opened at 102,250 yuan/mt, quickly moved lower to a low of 101,870 yuan/mt, then rose sharply to 102,310 yuan/mt, edged down, and mostly traded between 102,000-102,280 yuan/mt, before stabilizing and rising rapidly to touch a high of 102,620 yuan/mt, with a closing price of 102,530 yuan/mt. The Contango spread between the front-month and next-month contracts ranged from 60 yuan/mt to 10 yuan/mt. The import profit margin for SHFE copper against the 2607 front-month contract stood between a loss of 440 yuan/mt and a loss of 310 yuan/mt. Looking ahead to today, as the last trading day of the month, downstream purchasing sentiment continued to pull back, and consumption-side performance was weak. Suppliers lowered their quotes slightly, yet transactions remained sluggish, making the overall market quiet for both buyers and sellers. However, some cargoes with invoices dated this month still managed to secure deals due to invoice demand, indicating structural demand support. As a new monthly procurement cycle begins, coupled with relatively low copper prices, downstream restocking demand may be released, and consumption is expected to recover marginally. At that time, purchasing and sales sentiment may be boosted, and spot discounts could gradually narrow.
(2) Guangdong: On June 30, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 0 yuan/mt, down 20 yuan/mt from the previous trading day; standard-quality copper was quoted at a discount of 90 yuan/mt, down 30 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 150 yuan/mt, down 30 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 102,080 yuan/mt, down 240 yuan/mt from the previous trading day, and the average price of SX-EW copper was 101,975 yuan/mt, down 245 yuan/mt from the previous trading day. Overall, on the mid-year settlement day, market trading was sluggish, with neither buyers nor sellers actively participating.
(3) Imported Copper: On June 30, the average warrant price was flat from the previous trading day at $68/mt (price range $64-72/mt); the average B/L price was flat at $69/mt (price range $64-74/mt); the average EQ copper (CIF B/L) price was flat at $41/mt (price range $37-45/mt), with quotes referencing cargoes arriving in early July.
(4) Secondary Copper: On June 30, at 11:30, the futures closing price was 102,510 yuan/mt, down 370 yuan/mt from the previous trading day. The average spot premium was 0 yuan/mt, unchanged from the previous trading day. Today, copper scrap prices remained unchanged from the previous trading day. The sales sentiment index for copper scrap rose to 2.41, and the purchasing sentiment index rose to 2.45. The price difference between copper cathode and copper scrap was 1,560 yuan/mt, down 370 yuan/mt from the previous trading day. The price difference between copper cathode rod and secondary copper rod was 260 yuan/mt. According to SMM survey, copper prices consolidated, and the midday closing price edged down from yesterday. Secondary copper rod enterprises maintained yesterday’s procurement pace. Copper scrap suppliers were more inclined to consign their shipments to scrap utilization enterprises, with partial payments settled upfront and the balance paid later.
Price: On the macro front, US Fed official Hammack stated that inflation remains too high and further rate hikes may be needed. Interest rate futures showed that the probability of a September rate hike had risen to 80%. In the Middle East, Iran’s Foreign Ministry said there were virtually no plans for a meeting with the US in the coming days, but talks with Qatar on implementing the agreement could be held in Doha on July 1. Oman proposed a toll scheme for the Strait of Hormuz, while Iran’s parliament speaker advocated gradually enhancing the strait’s passage capacity. The market was awaiting the implementation of US tariff policy, and coupled with repeated Middle East tensions, copper prices fluctuated higher amid the tug-of-war. On the fundamentals, supply-side market circulation was tight with limited low-priced cargoes, keeping overall supply tight. On the demand side, downstream purchase willingness was weak, with a mostly wait-and-see stance. Overall, copper prices are expected to remain in the doldrums today.
[The information provided is for reference only. This document does not constitute direct investment research advice. Clients should make decisions prudently and not substitute this for their independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.]