In May 2026, the operating rate of secondary copper rod was 14.7%, higher than expectations of 12.17%, up 1.91 percentage points MoM and down 15.22 percentage points YoY. During May, China's secondary copper rod market as a whole remained caught in a combination of high copper prices, sharp fluctuations, and regulatory compliance pressure. The month was marked not by a one-sided shortage or surplus, but by a more intractable structural stalemate

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, next Monday marks the last trading day for the SHFE copper 2606 contract. According to SMM's #1 copper cathode price assessment methodology, SMM always quotes against the front-month contract. During the day, the center of copper prices moved up, and downstream procurement sentiment pulled back slightly, indicating that high prices somewhat curbed demand. Approaching delivery, suppliers showed a relatively strong willingness to deliver their open interest, keeping available cargo tight. In addition, spot inventory in the Guangdong region remained at a low level, with offers at a premium of around 200 yuan/mt, which may lend some support to premiums in the Shanghai region. Overall, premiums for Shanghai spot copper against the SHFE 2606 copper contract next Monday are expected to remain at a premium level.

This week, macro sentiment was shaped by two key narratives: accelerating US-Iran peace talks and higher-than-expected inflation. Peace talks notably heated up—Trump said a peace deal could be signed in Europe as soon as this weekend, and Iran allowed 10 tankers through the Strait of Hormuz as a goodwill gesture. Brent crude fell to a near two-month low of around $89/bbl as geopolitical risk premiums quickly faded. Mid-week, however, May CPI rose to 4.2% YoY, the first breach above 4% in three years (driven by energy, with core at 2.9%). The market’s expectation for the US Fed shifted from rate cuts to a possible hike within the year, and tightening fears weighed on industrial metals demand; copper prices briefly hit a three-week low. By the week’s end, optimism around US-Iran relations eased growth concerns, and copper prices rebounded, with COMEX recovering to around $6.35/lb. Overall, easing geopolitical tensions and sticky inflation offset each other. Ahead of the June 17 FOMC meeting (the first chaired by new Chair Warsh, who is expected to hold rates steady), the market leans toward a wait-and-see stance. Copper prices pulled back from highs on macro headwinds, with increased volatility. Fundamentals side, China’s spot market notably strengthened. On inventory, SMM social inventory fell to recent lows, and suppliers showed a strong willingness to hold prices firm. Spot premiums quickly flipped from discounts; South China premiums surged around 230 yuan/mt in total this week, with the approaching delivery-related backwardation structure supporting SHFE copper premiums. Demand side, dip-buying activity picked up when copper prices fell and trading recovered, but as prices rebounded, downstream buying interest was suppressed and the market cooled—overall, demand remained need-based. The SHFE/LME price ratio recovered slightly, with buyers showing greater purchase willingness. The overall picture is one of low-inventory support, strengthening spot premiums, and a demand pattern that switches with price moves, lending support to copper’s downside. Looking ahead to next week, macro focus will center on the June 17 FOMC meeting (attention on Warsh’s comments on the inflation overshoot and the dot plot), whether the US-Iran deal materializes and progress on Strait of Hormuz navigation resumption, while the June 30 US copper cathode tariff ruling adds further uncertainty. If peace talks deliver and geopolitical risk continues to recede, risk appetite could recover but crude oil and inflation expectations would likely pull back in tandem; if sticky inflation pushes the Fed hawkish, risk assets would face pressure. As for fundamentals, low inventories and strengthening spot premiums offer downside support, while high copper prices deter chasing. LME copper is expected to trade at $13,300–$13,800/mt, and SHFE copper is expected to trade at 102,800-105,500, moving sideways in a high range with a slightly softer center. Spot premiums are expected to persist; attention will focus on the sustainability of suppliers holding prices firm post-delivery and downstream restocking intensity.

SMM Analysis: Since Q4 2025, end-use demand in the copper foil industry has fully erupted, the industry has shown high prosperity, and processing fees for various specifications of copper foil have been steadily rising...

SMM, June 12: Spot #1 copper cathode in Guangdong against the front-month contract: high-quality copper was quoted at premiums of 270 yuan/mt, up 30 yuan/mt from the previous trading day; standard-quality copper was quoted at premiums of 210 yuan/mt, up 30 yuan/mt from the previous trading day; SX-EW copper was quoted at premiums of 150 yuan/mt, up 30 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 104,715 yuan/mt, up 1,090 yuan/mt from the previous trading day, while the average price of SX-EW copper was 104,625 yuan/mt, up 1,075 yuan/mt from the previous trading day. Spot market: Guangdong’s inventory fell for the ninth consecutive day, hitting a new low for the year and coming in 9,000 mt below the same period last year. Driven by tight inventory, suppliers ignored a sharp rebound in copper prices today and continued to hold prices firm when selling, sending premiums up 30 yuan/mt from yesterday. Spot premiums accumulated an increase of 230 yuan/mt this week. The purchasing sentiment for copper cathode in Guangdong today stood at 2.22, down 0.08 from the previous trading day, while the selling sentiment reached 2.64, down 0.2 from the previous trading day (historical data can be accessed via the database). Overall, with inventory at a record low, suppliers actively held prices firm, driving premiums up by a cumulative 230 yuan/mt this week, though trading sentiment weakened.

Today, spot #1 copper cathode in North China against the front-month contract was quoted at discounts of 260-140 yuan/mt, with the average discount at 200 yuan/mt, down 10 yuan/mt from the previous trading day. The average transaction price was 104,490 yuan/mt, up 1,460 yuan/mt from the previous trading day.