U.S.-Iran Strikes Spark Peace Talk Concerns, Intraday Copper Prices Decline [SMM BC Copper Commentary]

Today, the most-traded BC copper contract 2606 opened at 93,950 yuan/mt, touching a high of 94,020 yuan/mt at the beginning of the session before the center fluctuated downward. It touched a low of 92,590 yuan/mt near the end of the session and finally closed at 92,990 yuan/mt, down 0.72%. Open interest stood at 2,608 lots, a decrease of 2,664 lots from the previous trading day. Trading volume stood at 6,465 lots, a decrease of 2,699 lots from the previous trading day. On the macro front, tensions in the Strait of Hormuz escalated. After the US launched military operations, Iran immediately retaliated. Expectations for US-Iran peace talks cooled, and expectations for normal navigation through the Strait of Hormuz pulled back accordingly. Inflationary pressures intensified, which was bearish for copper prices. Fundamentals side, on the supply end, arrivals of domestic sources edged up slightly, and tight spot supply eased marginally, but the circulation of high-quality copper sources remained relatively tight. On the demand end, downstream enterprises overall still primarily made just-in-time procurement, with insufficient willingness to chase higher prices.

The SHFE copper 2606 contract closed at 104,840 yuan/mt. Based on the BC copper 2606 contract price of 92,990 yuan/mt, its after-tax price was 105,079 yuan/mt. The price spread between the SHFE copper 2606 contract and BC copper was -239 yuan/mt, showing an inversion that narrowed compared to the previous day.