Escalating US-Iran Conflict and Rising Rate Hike Expectations, Copper Prices Consolidate on a Subdued Note [SMM Copper Morning Brief]

Tuesday, July 8, 2026
Futures: Overnight, LME copper opened at $13,393/mt. In early trading, the copper price center rose and touched a high of $13,452/mt, then drifted lower, hitting a low of $13,323/mt near the end, and finally settled at $13,334.5/mt, falling by 0.57%. Trading volume reached 10,600 lots, and open interest stood at 247,000 lots, down 2,082 lots from the previous trading day, driven by long liquidation. The most-traded SHFE copper 2608 contract opened at 103,080 yuan/mt overnight. In early trading, the price center edged up to 103,500 yuan/mt, then drifted lower throughout the session, touching a high of 102,880 yuan/mt near the end, and eventually settled at 103,100 yuan/mt, up 0.14%. Trading volume was 24,400 lots, and open interest reached 148,000 lots, a decrease of 854 lots from the previous session, driven by short covering.
[SMM Copper Morning Briefing] News:
(1) On Tuesday, July 7, the Chilean central bank reported that Chile, the world’s largest copper producer, posted a copper export value of $5.87 billion in June, up 17.6% year-on-year. The bank added that, driven by the increase in copper export value, the country recorded a trade surplus of $3.32 billion for the month, higher than the $2.9 billion expected by economists surveyed.
Spot:
(1) Shanghai: On July 7, SMM #1 copper cathode spot prices against the SHFE 2606 contract were quoted at premiums of 70-150 yuan/mt, with an average of 110 yuan/mt, up 30 yuan/mt from the previous trading day. In early trading, the SHFE copper 2607 contract showed a pattern of decline, stabilization, then retreat after a rapid rise. It opened at 102,940 yuan/mt, fell steadily to touch a low of 102,840 yuan/mt, then surged to a high of 103,180 yuan/mt, and subsequently traded mostly between 103,100-103,120 yuan/mt before pulling back slightly to close at 102,980 yuan/mt. The spread between the front-month and next-month contracts ranged from a contango of 50 yuan/mt to a backwardation of 10 yuan/mt, and the import profit margin for SHFE copper against the 2607 contract showed a loss of 140-50 yuan/mt. Looking ahead today, according to China’s National Meteorological Center, Typhoon Bavi, the ninth typhoon this year, has intensified into a super typhoon and is expected to approach China’s eastern sea area around July 10, with a high likelihood of making landfall in east China. Affected by this, downstream copper semis processors in Jiangsu and Zhejiang worried that the strong winds and heavy rains from the typhoon could disrupt logistics and production, so they concentrated on early stockpiling purchases, pushing the overall center of SHFE spot copper premiums higher. From supplier behavior, market trading was active, and after low-priced cargoes were quickly absorbed, suppliers’ willingness to hold prices firm strengthened further. On the whole, driven by the concentrated release of typhoon-related stockpiling demand, firm offers from suppliers, and continuous inventory destocking, spot premiums for the SHFE copper 2607 contract are expected to hold today, with the overall center edging up slightly.
(2) Guangdong: On July 7, #1 copper cathode spot against the front-month contract in Guangdong: high-quality copper was at a premium of 80 yuan/mt, up 10 yuan/mt from the previous trading day; standard-quality copper was at a premium of 10 yuan/mt, up 20 yuan/mt from the previous trading day; SX-EW copper was at a discount of 60 yuan/mt, up 30 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 103,145 yuan/mt, down 210 yuan/mt from the previous trading day, while the average price of SX-EW copper was 103,040 yuan/mt, down 205 yuan/mt from the previous trading day. Overall, with inventory falling for four consecutive days, suppliers took the opportunity to hold prices firm, spot premiums rose, and overall trading improved.
(3) Imported copper: On July 7, the average warrant price rose $6/mt from the previous trading day to $80/mt (price range: $75~80/mt); the average B/L price rose $6/mt from the previous trading day to $80/mt (price range: $74~86/mt); the average price of EQ copper (CIF B/L) rose $3/mt from the previous trading day to $48/mt (price range: $41~55/mt), with quotations referencing cargoes arriving from July to mid-August.
(4) Secondary copper: As of 11:30 on July 7, the futures closing price was 102,980 yuan/mt, down 130 yuan/mt from the previous trading day. The average spot premium was 110 yuan/mt, up 30 yuan/mt from the previous trading day. Copper scrap prices remained unchanged from the previous trading day. The sales sentiment index for copper scrap fell to 2.3, and the procurement sentiment index fell to 2.38. The price spread between copper cathode and copper scrap stood at 1,693 yuan/mt, down 100 yuan/mt from the previous trading day. The price spread between copper cathode rod and secondary copper rod was 630 yuan/mt. According to an SMM survey, as copper prices consolidated, both the sales and procurement sentiment indices in the copper scrap market declined during the day. With the off-season arriving, high copper scrap prices discouraged many secondary copper rod enterprises from purchasing. The price spread between copper cathode rod and secondary copper rod struggled to widen due to high raw material prices, and end-use consumption remained sluggish.
Prices: On the macro front, Iran was exposed for attacking Qatari LNG tanker near the Strait of Hormuz. The US subsequently canceled its exemption for Iranian oil sales, while several locations in southern Iran faced further US strikes. Crude oil prices rose, and market expectations for US Fed interest rate hikes heated up, capping upside room for copper prices. Moreover, the market awaited the US decision on tariff hikes for copper cathode, with strong wait-and-see sentiment among funds, and copper prices moved sideways. Supply side, arrivals of imported and domestic copper remained low, compounded by typhoon disruptions, and suppliers’ stockpiling and firm pricing sentiment strengthened. Demand side, affected by high copper prices, downstream users mainly stockpiled on a need-to basis. Overall, copper prices were expected to consolidate on a subdued note today.
[The information provided is for reference only. This article does not constitute direct investment, research, or decision-making advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients are not related to Shanghai Metals Market.]