Non-Farm Payrolls Data Weakness Sends US Dollar Lower, Copper Prices Rebound Rapidly [SMM Copper Morning Meeting Minutes]

Friday, July 3, 2026

Futures market: Overnight, LME copper opened at $13,256.5/mt, dipped to $13,240/mt at the start of trading, then drifted higher to touch a high of $13,398/mt. Subsequently, the price center gradually shifted lower, and it finally closed at $13,285.5/mt, down 0.34%. Trading volume reached 14,800 lots, and open interest stood at 250,000 lots, up 8,743 lots from the previous trading day, reflecting an increase in short positions. Overnight, the most-traded SHFE copper 2608 contract opened at 102,470 yuan/mt, drifted higher early to test 102,960 yuan/mt, then the price center shifted lower and moved sideways, dipping to a low of 102,280 yuan/mt near the close, and finally settled at 102,410 yuan/mt, up 0.12%. Trading volume reached 34,800 lots, and open interest stood at 152,000 lots, down 3,155 lots from the previous trading day, reflecting a reduction in short positions.

[SMM Copper Morning Brief] News: (1) The US labor market cooled more than expected in June. On Thursday, the Bureau of Labor Statistics reported that nonfarm payrolls increased by only 57,000, roughly half of the 113,000 consensus estimate and well below the revised 129,000 in May (initially 172,000). Previous data were sharply revised downward, leading markets to take a more cautious stance on the employment outlook and prompting investors to reassess the Fed's monetary policy path.

Spot: (1) Shanghai: On July 2, SMM #1 copper cathode spot was quoted at parity to a premium of 100 yuan/mt against the front-month 2606 contract, averaging a premium of 50 yuan/mt, up 10 yuan/mt from the previous trading day. The SHFE copper 2607 contract consolidated then edged down in early trading. It opened at 102,300 yuan/mt, moved sideways and edged up after the open, trading mainly between 102,240 and 102,450 yuan/mt, before edging lower near the close to end at 102,180 yuan/mt. The inter-month price spread ranged from a contango of 60 yuan/mt to a backwardation of 10 yuan/mt. The import profit margin for SHFE copper against the 2607 contract ranged from a loss of 120 yuan/mt to a loss of 60 yuan/mt. Looking ahead to today, the early-month procurement cycle continues, downstream demand remains in release, and buying and selling sentiment keeps rebounding, with decent trading activity. In terms of supplier behavior, after low-priced cargoes were quickly absorbed, discount cargoes became scarce in the market, suppliers showed stronger resolve to hold prices firm, and buyers bidding at parity failed to conclude deals.

(2) Guangdong: On July 2, Guangdong #1 copper cathode spot against the front-month contract: high-quality copper quoted at a premium of 50 yuan/mt, unchanged from the previous trading day; standard-quality copper at parity, unchanged; SX-EW copper at a discount of 60 yuan/mt, unchanged. The average price of #1 copper cathode in Guangdong was 102,340 yuan/mt, up 120 yuan/mt from the previous trading day, while the average price of SX-EW copper was 102,255 yuan/mt, also up 120 yuan/mt. Overall, intraday premiums retreated after a rapid rise, merely flat from yesterday, and overall trading was moderate.

(3) Imported copper: On July 2, the average warrant price was up $3/mt from the previous trading day, quoted at $74/mt (range $70-78/mt); the average B/L price was up $4/mt, quoted at $74/mt (range $68-80/mt); the average EQ copper (CIF B/L) price was up $2/mt, quoted at $45/mt (range $40-50/mt), with quotes referencing cargoes arriving from July to early August. Due to tight supply recently, coupled with a rebound in the SHFE/LME price ratio today, suppliers held firm offers, leading to significant divergence between buyers and sellers and limited actual transactions.

(4) Secondary copper: On July 2, at 11:30, the futures closing price was 102,180 yuan/mt, up 160 yuan/mt from the previous trading day; the average spot premium was 50 yuan/mt, up 10 yuan/mt from the previous trading day. Today, secondary copper raw material prices rose 200 yuan/mt from the previous trading day. The sales sentiment index for copper scrap fell to 2.32, and the procurement sentiment index fell to 2.45. The price difference between copper cathode and copper scrap was 1,169 yuan/mt, down 53 yuan/mt from the previous trading day. The price difference between copper cathode rod and secondary copper rod was 130 yuan/mt. According to an SMM survey, on the second day of the implementation of the "reverse invoicing" rule, there was no significant change in copper scrap market transactions. Due to tight supply, the price spread between copper scrap and copper cathode remained narrow, and many secondary copper rod enterprises continued to make just-in-time procurement.

Price: On the macro front, signs of easing tensions in the Middle East emerged; the next round of US-Iran negotiations is scheduled for July 18, and Trump said Iran has largely accepted all US demands. The US unemployment rate fell to 4.2% in June, but nonfarm payrolls gained only 57,000, well below expectations, and the previous two months' data were revised down by a combined 74,000. Overall, the job market performed below expectations, easing expectations for US Fed rate hikes, and copper prices maintained a fluctuating trend. On the fundamentals front, supply side, arrivals of both imported and domestic shipments decreased, leading to overall tight supply. Demand side, downstream users maintained just-in-time procurement, and demand showed signs of stabilization. On the inventory front, as of Thursday, July 2, SMM copper inventories in major Chinese markets fell 6,100 mt WoW to 199,900 mt, while total inventories were up 68,100 mt YoY from 131,800 mt. Overall, copper prices are expected to drift higher today.

[Data Source Statement: All data other than public information are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only, and do not constitute any investment advice.]