Expectations for US Fed Interest Rate Cuts Heat Up, Copper Prices Consolidate on a Strong Note and Close Higher [SMM Copper Morning Briefing]

Tuesday, July 7, 2026
Futures: Overnight LME copper opened at $13,385/mt, dipped to $13,320/mt in early trading, then drifted higher, hitting a high of $13,422/mt near the close before settling at $13,411/mt, up 0.4%. Trading volume reached 11,700 lots, and open interest stood at 249,000 lots, down 579 lots from the previous trading day, reflecting bear position reduction. The most-traded SHFE copper 2608 contract opened overnight at 102,630 yuan/mt, dipped to 102,610 yuan/mt, then drifted higher throughout the session, reaching a high of 103,270 yuan/mt near the close before settling at 103,090 yuan/mt, up 0.01%. Trading volume was 19,000 lots, and open interest stood at 150,000 lots, down 1,235 lots from the previous trading day, also reflecting bear position reduction.
[SMM Copper Morning Briefing] News:
(1) According to Mining.com, Koryx Copper announced extensive mineralization from drilling at its Haib project in southern Namibia. Analysts believe the company is becoming a more attractive copper developer in Africa. "While Koryx has previously released a preliminary economic assessment, the updated resource supports a larger mine," said BMO Capital Markets analyst Rene Cartier in an investment note. "We see few projects in investable African jurisdictions with annual production exceeding 100,000 mt of copper, so the Haib project has a clear advantage."
Spot
(1) Shanghai: On July 6, SMM #1 copper cathode spot prices against the most-traded SHFE 2606 contract were quoted at premiums of 40–120 yuan/mt, with an average of 80 yuan/mt, up 10 yuan/mt from the previous trading day. The SHFE copper 2607 contract opened higher in early trading, retreating after a rapid rise before stabilizing and rebounding. The opening price was 102,980 yuan/mt, and after opening, prices kept pushing higher, touching a session high of 103,500 yuan/mt, mainly trading between 103,280 yuan/mt and 103,450 yuan/mt. Prices then fell quickly, hitting a session low of 102,910 yuan/mt before stabilizing and recovering, returning to 103,110 yuan/mt by the close. The price spread between the nearest contracts ranged from a Contango of 70 yuan/mt to a Backwardation of 10 yuan/mt, while the SHFE copper 2607 contract import profit margin ranged from a loss of 180 yuan/mt to a loss of 90 yuan/mt. Looking ahead to today, SMM recorded Shanghai social inventory at 122,400 mt, down 4,100 mt WoW from last Thursday, while Jiangsu social inventory stood at 36,000 mt, down 200 mt WoW from last Thursday. Continuous destocking drove the center of SHFE spot premiums higher, as the tight supply-side situation remained unchanged, providing strong support for spot premiums. After low-priced cargoes were quickly absorbed, available spot supply in the market became tight, and suppliers held prices firm with conviction. Overall, driven by inventory drawdowns, firm supplier pricing, and downstream demand resilience, SHFE spot premiums against the 2607 contract are expected to hold today, with the overall center likely edging slightly higher.
(2) Guangdong: On July 6, #1 copper cathode spot against the front-month contract in Guangdong: high-quality copper was quoted at a premium of 70 yuan/mt, up 10 yuan/mt from the previous trading day; standard-quality copper was quoted at a discount of 10 yuan/mt, down 30 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 90 yuan/mt, down 40 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 103,355 yuan/mt, up 390 yuan/mt from the previous trading day, while the average price of SX-EW copper was 103,245 yuan/mt, up 370 yuan/mt from the previous trading day. Overall, inventories fell for the third straight day, but spot premiums declined, with trading activity remaining muted.
(3) Imported copper: On July 6, the average warrant price was flat from the previous trading day at $74/mt (price range $70-78/mt); the average B/L price was flat at $74/mt (price range $68-80/mt); the average EQ copper (CIF B/L) price was flat at $45/mt (price range $40-50/mt), with quotes referencing cargoes arriving from July to mid-August.
(4) Secondary copper: On July 6, at 11:30, the futures closing price was 103,110 yuan/mt, up 40 yuan/mt from the previous trading day. The average spot premium was 80 yuan/mt, up 20 yuan/mt from the previous trading day. Today’s secondary copper raw material prices rose 200 yuan/mt from the previous trading day. The sentiment index for sales of secondary copper raw materials dropped to 2.38, while the purchase sentiment index rose to 2.43. The price difference between copper cathode and copper scrap stood at 1,793 yuan/mt, down 164 yuan/mt from the previous trading day. The price difference between copper cathode rod and secondary copper rod was 530 yuan/mt. According to the SMM survey, copper prices weakened and were basically flat from last Friday. Suppliers of copper scrap showed flat willingness to sell, while secondary copper rod enterprises, though willing to purchase, preferred to buy on dips and were reluctant to transact at market prices.
Prices: On the macro front, Fed Chairman Warsh’s previous dovish remarks heated up market expectations for interest rate cuts, providing support for copper prices. However, the US tariff policy on imported copper cathode has yet to be implemented, with the lingering uncertainty continuing to weigh on market sentiment and fostering a wait-and-see attitude. On the fundamentals side, supply-wise, arrivals of both imported and domestic copper remained low, keeping overall supplies tight. Demand-wise, copper prices consolidating at highs continued to suppress downstream purchasing sentiment, with enterprises mainly making just-in-time procurements. As for inventories, as of Monday, July 6, SMM data showed copper inventories in major Chinese regions dropped 15,200 mt WoW to 192,200 mt. Total inventories increased by 49,300 mt compared to 142,900 mt in the same period last year, with destocking seen across all regions. Overall, copper prices today are expected to consolidate on a strong note.
[The information provided is for reference only and does not constitute direct investment advice. Clients should make prudent decisions and not substitute this for independent judgment. Any decisions made by clients are not related to Shanghai Metals Market.]