Copper prices pulled back slightly from highs this week. LME copper broke through the $12,900/mt level early in the week but dropped back slightly to around $12,400/mt by the week's end. SHFE copper fell below the 100,000 yuan/mt mark to around 98,000 yuan/mt. From a macro perspective, mixed internal signals from the US Fed regarding expectations for a January interest rate cut, coupled with a broader pullback in precious metals and the nonferrous complex, weighed on copper prices. In China, the Ministry of Finance clarified that a package of measures, including expanded fiscal spending, consumption promotion, and employment stabilization, will be implemented next year to boost the economy, providing a floor for SHFE prices.
On the fundamentals side, there were only three spot trading days this week, with limited activity in both copper concentrate and copper cathode spot trade. The market was quiet ahead of the holiday. High copper prices also exerted significant negative feedback on downstream production. Despite high export volumes, social inventory saw a substantial buildup.
Looking ahead to next week, with the broader precious metals and nonferrous complex retreating from highs and demand remaining persistently weak, copper prices lack strong upward momentum. LME copper is expected to fluctuate between $12,200/mt and $12,600/mt, while SHFE copper is expected to trade between 96,500 yuan/mt and 99,000 yuan/mt. For spot markets, as some 2026 execution contracts commence after the holiday, trade demand and circulation volume are expected to increase, and spot premiums are anticipated to recover. Spot prices against the SHFE copper 2601 contract are expected to range from a discount of 300 yuan/mt to a discount of 100 yuan/mt.
