As of March 9, SMM recorded total social inventory of copper cathode in major regions of China at 578,900 mt, up 1,700 mt from last week and up 70,400 mt from February 24, reaching a historical high. Over the same period, spot premiums for SMM #1 copper cathode gradually recovered from premium -260 yuan/mt on February 27 to parity on March 10. Overall, this upswing in spot premiums was mainly driven by the approach of delivery, under which the contango price spread between nearby and next-month contracts stayed around 300 yuan/mt; suppliers held prices firm and withheld sales, while about half of the material was converted into warrants and locked in, jointly tightening circulating supply. Observing the inventory accumulation pace, from the week of March 2 to March 9, inventories in three key regions increased by 14,400 tons, a growth of 2.65%. This marks a significant slowdown compared to the average weekly increase of approximately 45,000 tons during the period from February 5 to February 26. The deceleration in inventory buildup provided room for improvement in premiums. Current inventory accumulation primarily stems from two factors: First, the continued arrival of imported copper. According to SMM research, a substantial volume of imported copper continues to arrive recently, and it is expected that arrivals will not see a significant decline in March. The steady inflow of imported materials provides a continuous supply supplement to the domestic market and is a crucial support for maintaining high total inventory levels. The actual situation of imported arrivals in April remains to be confirmed, requiring close attention to customs data at month-end and changes in port clearance pace. Second, some cargoes are being delivered into bonded/warehouse warrant stocks. According to the electrolytic copper spot purchasing and selling sentiment indices for the Shanghai region recorded by SMM, the purchasing sentiment index rose from 2.08 on February 24 to 2.78 on March 10, while the selling sentiment index increased from 2.09 to 2.90 over the same period. Some downstream players have limited acceptance of current copper prices, maintaining a procurement strategy focused on immediate needs, resulting in selling sentiment slightly outpacing purchasing sentiment. Based on SMM's communications with enterprises: Upstream Producer 1: Recent consumption is relatively good, with daily sales around 2,000 tons. Upstream Producer 2: Currently produced electrolytic copper is primarily for export. Domestic inventories are low, so there's no rush to sell. Unwilling to sell when discounts are excessive. Trader 1: Quotations in the Changzhou market are higher than in Shanghai, mainly because locally available circulating cargoes are mostly warrants. Under the current spread structure, holders have high flexibility in selling – they can choose to sell or hold. Trader 2: The market is not short of supply; there are still a large number of warrants in warehouses awaiting digestion. However, due to the delivery mechanism, the incentive to sell depends on the premium level. Only when the premium exceeds the cost of capital will there be a strong willingness to liquidate. Downstream User 1: Recent orders are relatively robust. When copper prices fell on March 9, we already replenished inventories at the low point. Current raw material inventory can sustain operations until March 15. There are no immediate plans for further procurement; subsequent needs will primarily be met through long-term contract drawdowns. Downstream User 2: The recent spot premium has been quite firm, mainly due to the spread between months. Without such a high monthly spread, the premium would definitely not reach this level. In summary, this round of recovery in spot premiums is driven by multiple factors: First, the approach of delivery and the widening monthly spread strengthened holders' willingness to support prices. With delivery approaching, the Contango spread between months remains around 300 yuan/ton. Holders are underpinning prices, reluctant to sell, and strongly inclined to deliver stocks into warrants. Second, the inventory structure further amplified the tightness of available circulating supply. Taking Jiangsu as an example, out of 118,000 tons of social inventory, 94,000 tons were futures warrants. This portion is locked in delivery warehouses, making it difficult to form effective supply in the short term, leading to a phase of relative tightness in spot market circulating cargoes. According to SMM, some downstream companies in Jiangsu struggled to source materials in the market and opted to procure using the SMM Flat Copper Price average as a benchmark with minor adjustments. Third, the comprehensive resumption of work by downstream enterprises released procurement demand. After the Lantern Festival, downstream processing enterprises in Jiangsu, Zhejiang, and Shanghai entered a full resumption phase. Surveys indicate that companies in the battery materials sector maintain high operating rates. Copper foil processors reported that downstream battery manufacturers sustain high operating rates, with March production schedules already showing characteristics of the peak season. Copper tube companies, supported by peak season stocking from the air conditioning industry, have operating rates exceeding pre-holiday levels. Although the recovery pace in the wire & cable and copper rod sectors is relatively slow, overall procurement demand has significantly improved compared to the first week after the holiday. Fourth, the decline in copper prices activated downstream restocking intentions. Recently, Shanghai copper futures prices retreated somewhat, stimulating downstream enterprises to purchase at dips. Previously suppressed by high copper prices, downstream players mostly maintained a cautious just-in-time procurement strategy, resulting in generally low raw material inventory levels. After the price pullback, some companies took the opportunity to replenish stocks, boosting spot transaction activity.

In 2025, China's NEV production exceeded 16.6 million units, with a penetration rate as high as 48.1%. The rapid expansion of the NEV industry has driven rapid growth in sales of upstream thermal management parts. According to ChinaIOL data, the total annual sales of air conditioning units (AC units) in China reached 19 million sets in 2025, up 26.7% YoY.

[ChinaIOL Commercial Air Conditioning Latest Data] In 2025, the sales scale of the central air conditioning industry reached 138.68 billion yuan, presenting a distinct pattern of "domestic cold, external hot." Among this, the domestic sales scale was 112.55 billion yuan, down 7.4% YoY, mainly affected by the sluggish real estate market, weak traditional engineering demand, and intensified price wars for equipment, with small and medium-sized brands facing particularly prominent operational pressure.

Procurement Announcement for Air Conditioners in the EPC General Contracting Project of the 220 kV Power Transmission and Transformation Project at Bensteel Group's Energy General Plant 1. Procurement Conditions The purchaser for this procurement project, the EPC General Contracting Project of the 220 kV Power Transmission and Transformation Project at Bensteel Group's Energy General Plant - Air Conditioners (AGGCJSHGXHD250827232836), is the Procurement Office of Ansteel Group Engineering Technology Co., Ltd. The funds for the procurement project are self-raised, and the project has met the procurement conditions. A public inquiry and comparison are now being conducted. 2. Project Overview and Procurement Scope 2.1 Project Name: EPC General Contracting Project of the 220 kV Power Transmission and Transformation Project at Bensteel Group's Energy General Plant - Air Conditioners 2.2 Alternative Procurement Methods in Case of Procurement Failure: Transition to Negotiated Procurement or Direct Procurement 2.3 The procurement content, scope, and scale of this project are detailed in the attachment "Material List Attachment.pdf." 3. Bidder Qualification Requirements 3.1 Joint bidding is not allowed for this procurement. 3.2 This procurement requires bidders to meet the following qualification requirements: (1) Business License 3.3 This procurement requires bidders to meet the following registered capital requirements: Registered Capital: 500 (10,000 yuan) or more 3.4 This procurement requires bidders to meet the following performance requirements: The bidder must have at least one air conditioner supply performance (contract and corresponding VAT invoice) since 2022. 3.5 This procurement requires bidders to meet the following capability requirements, financial requirements, and other requirements: Financial Requirements: The bidder's registered capital shall not be less than 5 million yuan. Capability Requirements: (1) Scanned copy or photo of the original Business License (or duplicate). (2) Scanned copy or photo of the original Tax Registration Certificate (or duplicate), except for those with a unified social credit code. (3) Scanned copy or photo of the original Organization Code Certificate (or duplicate), except for those with a unified social credit code. (4) Type of bidding enterprise: Unlimited. (5) The air conditioner brands required for this tender are Gree, Midea, and Haier. Agent bidders need to provide valid authorization for the brands they are bidding on (project authorization is allowed). When the producer bids, the agent's bid is invalid. Other Requirements: Refer to the attachment for details (if necessary). 3.6 For projects that must be tendered according to the law, bidders who are dishonest persons subject to enforcement shall be invalid. 4. Acquisition of Procurement Documents 4.1 All interested bidders are requested to log in to the Ansteel Smart Tendering and Bidding Platform at http://bid.ansteel.cn from 15:15 on August 27, 2025, to 08:00 on September 4, 2025 (Beijing Time, the same hereinafter) to download the electronic procurement documents. Click for Details:

1. Procurement Conditions The purchaser for this procurement project, which includes air conditioners and other items (AGLYCGHGXHD250807229052), is the Procurement Management Department of the Procurement and Sales Center of Lingyuan Iron and Steel Co., Ltd. The funds for this procurement project are self-raised, and the project is now ready for procurement. A public inquiry and comparison are being conducted. 2. Project Overview and Procurement Scope 2.1 Project Name: Air Conditioners and Other Items 2.2 Alternative Procurement Method in Case of Failed Procurement: Transition to Negotiated Procurement 2.3 For details on the procurement content, scope, and scale of this project, please refer to the attached "Material List Attachment.pdf". 3. Bidder Qualification Requirements 3.1 Joint bidding is not allowed for this procurement. 3.2 For this procurement, bidders must meet the following qualification requirements: (1) Circulation-type business license (2) Production-type business license 3.3 For this procurement, bidders must meet the following registered capital requirements: Production-type registered capital: 1 million yuan or above Circulation-type registered capital: 1 million yuan or above 3.4 For this procurement, bidders must meet the following performance requirements: Provide scanned copies or photos of air conditioner supply performance (at least one contract and corresponding invoice) from January 1, 2023, to the bid submission deadline, based on the contract signing date. 3.5 For this procurement, bidders must meet the following capability, financial, and other requirements: Financial requirements: Registered capital of no less than 1 million yuan (RMB) Capability requirements: See the attachment for details (if any) Other requirements: See the attachment for details (if any) 3.6 For this procurement, if the project is legally required to undergo tendering, bids from dishonest individuals subject to enforcement are invalid. 4. Acquisition of Procurement Documents 4.1 Those interested in participating in the bidding should log in to the Ansteel Smart Tendering and Bidding Platform at http://bid.ansteel.cn between 11:00 AM on August 7, 2025, and 8:00 AM on August 18, 2025 (Beijing time, the same hereinafter) to download the electronic procurement documents. Click for details:

Macro News 1. The spokesperson of the Ministry of Foreign Affairs announced that, at the invitation of President Kassym-Jomart Tokayev of the Republic of Kazakhstan, President Xi Jinping will attend the second China-Central Asia Summit in Astana, Kazakhstan, from June 16 to 18. 2. Li Qiang chaired a State Council executive meeting to deploy the replication and promotion of pilot measures in the China (Shanghai) Pilot Free Trade Zone, hear reports on the construction of a new model for real estate development and the promotion of high-quality housing, and study measures to optimize the centralised procurement of pharmaceuticals and medical consumables. 3. According to data from the People's Bank of China, at the end of May, the balance of broad money (M2) was 325.78 trillion yuan, up 7.9% YoY. The balance of narrow money (M1) was 108.91 trillion yuan, up 2.3% YoY. The balance of currency in circulation (M0) was 13.13 trillion yuan, up 12.1% YoY. Net cash injection in the first five months was 306.4 billion yuan. The increase in aggregate social financing in January-May was 18.63 trillion yuan, 3.83 trillion yuan more than the same period last year. RMB loans increased by 10.68 trillion yuan in the first five months. 4. On June 13, the People's Bank of China announced again that it would conduct 400 billion yuan of outright reverse repo operations on June 16 with a term of six months (182 days), indicating that the central bank would achieve a net injection for the entire month. 5. The World Trade Organization held the second annual meeting of the Council for Trade in Services in Geneva, Switzerland, on June 13. China pointed out the misleading narrative and erroneous logic of the US's "reciprocal tariff" and urged the US to comply with WTO rules, resolve differences through multilateral cooperation rather than unilateral measures, and jointly maintain the stability of the global trading system with all parties. 6. The New Zealand government's official website announced that starting from November 2025, Chinese passport holders entering New Zealand from Australia with valid Australian tourist, work, student, or family visas will be exempt from visa requirements for stays of up to three months. Industry News 1. Eight departments, including the Ministry of Industry and Information Technology, are soliciting public comments on the "Guidelines for the Security of Outbound Automobile Data (2025 Edition)". Automobile data processors shall declare a security assessment for outbound data if they provide automobile data overseas under any of the following circumstances: (1) providing important data overseas; (2) cumulatively providing personal information (excluding sensitive personal information) of more than 1 million individuals overseas since January 1 of the current year; (3) cumulatively providing sensitive personal information of more than 10,000 individuals overseas since January 1 of the current year; (4) operators of critical information infrastructure providing personal information overseas; (5) other circumstances requiring a security assessment for outbound data as specified by relevant state regulations. 2. On the 15th, the official WeChat account of the Shenzhen Municipal Committee of the Revolutionary Committee of the Chinese Kuomintang (RCCCK) published an article by He Jie, Chairman of the Shenzhen Municipal Committee of the RCCCK, discussing Shenzhen's new mission in comprehensive reform. He Jie stated that relevant departments in Shenzhen are currently formulating relevant listing rules, with the expectation of piloting the secondary listing of red-chip stocks, which will provide more convenient and efficient listing channels for science and technology innovation enterprises. He Jie emphasized that the blueprint for comprehensive reform "2.0" has already been drawn up, and the key lies in effective implementation. Many reforms are still framework-based and directional in nature, requiring integration with practical needs, particularly achieving an organic combination of "top-level design and local initiatives." 3. According to statistics from Choice, as of June 14th, 105 public offering products (with multiple share classes combined) have been liquidated since the beginning of this year. In terms of termination reasons, 83 products were terminated due to the net asset value of the fund falling below contractual limits, 21 products were terminated with the consent of the fund holders' meeting, and 1 product was terminated due to contract expiration. Among these, equity liquidations accounted for 70%, with industry-themed funds in sectors such as new energy, pharmaceuticals, and consumption becoming the "hardest-hit areas." 4. The China Securities Regulatory Commission (CSRC) issued an administrative penalty decision. During the period in question, the account group controlled by Tu Wenbin had significant capital advantages, manipulating the prices of multiple stocks through continuous trading, driving up stock prices, large-volume limit-up orders, and false order placements and cancellations. The CSRC decided to impose penalties, with the total amount of fines and confiscations reaching nearly 77 million yuan. 5. On June 15th, a reporter learned from China National Nuclear Corporation (CNNC) that yttrium-90 glass microspheres irradiated by Qinshan Nuclear Power's "Hefu No. 1" reactor were successfully removed from the reactor and passed relevant detections, marking China's successful mastery of the technology for producing yttrium-90 in commercial reactors, enabling mass production. 6. The opening forum of the Golden Goblet Film Forum at the 27th Shanghai International Film Festival was held on June 15th. Participants unanimously agreed that the current film market has reached a moment for a fresh start. Facing industry challenges, chairmen and executives of multiple listed film companies discussed solutions, with directions such as increasing non-ticket revenue, reducing the number of films produced, and lowering production costs emerging as potential solutions. Corporate News 1. Kweichow Moutai announced an adjustment to its 2024 annual profit distribution plan, increasing the dividend per share to 27.673 yuan/share. 2. On June 14th, POP MART Korea issued an announcement stating that due to concerns about potential safety accidents at recent offline sales venues, the company has decided to temporarily suspend offline sales of the entire LABUBU plush toy and LABUBU plush keychain series. 3. GAC Group issued a commitment announcement, stating that it will ensure the fulfillment of dealer rebates within two months from today. 4. Guotai Haitong Securities announced that it has received an administrative licensing decision from the People's Bank of China (PBOC) for the issuance of 15 billion yuan in science and technology innovation bonds. 5. Yong'an Pharmaceutical announced that the company's stock price has risen significantly in the short term, severely deviating from the overall market trend, and there is a high risk of speculation. 6. *ST Tongzhou announced that the company's stock will be suspended for one day on June 16, and starting from June 17, the delisting risk warning and other risk warnings will be revoked, with the stock abbreviation changing to Tongzhou Electronics. 7. Haimo Technologies announced that the controlling shareholder and actual controller are proposed to be changed to Fan Zhonghua, and the stock will resume trading from June 16. 8. *ST Haiyue announced that it will repurchase company shares worth 30 million to 50 million yuan during the delisting consolidation period. 9. Huayang New Materials issued a stock trading risk warning announcement, stating that the company does not possess the attributes of rare earth permanent magnets. 10. Honghui Fruits & Vegetables announced that the controlling shareholder is proposed to be changed to Shenze Ruitai, and the company's stock and convertible bonds will resume trading from the opening of the market on June 16. 11. Ruifeng Gaocai issued an announcement in response to rumors about the board secretary being placed under investigation, stating that the investigation does not involve the company's stock trading and that current production and operations are normal. 12. Haers stated on an interactive platform that its past cooperation with POP MART has been terminated, and the scope of the previous cooperation did not include Labubu. Global Markets 3. According to CCTV News, US President Trump stated on social media in the early hours of the 15th (Eastern Time) that "the United States has nothing to do with tonight's attacks on Iran" and warned that if Iran attacks the US in any form, the US armed forces will "respond with full force on an unprecedented scale." In addition, Trump claimed that the US could "easily facilitate an agreement to end this bloody conflict," but did not elaborate on how the agreement would be reached. 4. On Friday last week, US stocks opened lower and continued to decline, with all three major indices falling more than 1%. The Dow Jones Industrial Average fell 1.32% for the week; the Nasdaq Composite fell 0.63% for the week; and the S&P 500 index fell 0.39% for the week. Most large-cap tech stocks declined, with Intel falling more than 3% and Nvidia falling more than 2%; Tesla rose approximately 2%. The energy sector bucked the trend and surged, with Houston Energy rising more than 119% and US Energy rising more than 55%. Drone manufacturer Airo's US IPO closed up 140% on its first day. Oracle rose more than 7% for the week, nearly 24%, marking its best weekly performance since 2001. Most popular Chinese ADRs closed lower, with the Nasdaq Golden Dragon China Index falling 2.74%. Fangdd Network fell more than 9%, WeRide fell more than 7%, Kingsoft Cloud fell more than 6%, XPeng Motors fell more than 5%, Alibaba, Bilibili, and Li Auto all fell more than 3%, and JD.com, Pinduoduo, and Baidu all fell more than 2%. Investment Opportunities Reference 1. Xiaomi Auto unveils solid-state battery patent; institutions say eVTOL + humanoid robots open up incremental space for solid-state batteries Intellectual property information from Tianyancha shows that recently, Xiaomi Auto Technology Co., Ltd. applied for a patent titled "Solid-state battery composite electrode, preparation method, and solid-state battery comprising the composite electrode," which has been made public. The abstract indicates that the solid-state battery composite electrode disclosed in the patent effectively shortens the transmission path of metal ions in thick electrodes and accelerates the transmission rate of metal ions between electrodes, featuring high electrode loading and C-rate performance. Dongxing Securities stated that with the gradual entry of fields such as eVTOL and humanoid robots into a phase of rapid growth, along with the release of technological solutions and industrialisation application timelines for all-solid-state batteries by various enterprises, driven by sustained new demand, the application and implementation of solid-state battery technology is expected to accelerate, with the industrialisation process already showing an accelerating trend. Battery enterprises with a first-mover advantage in solid-state battery technology and leading application deployment will primarily benefit. Sihan Industry Research Institute believes that AI is empowering industrial transformation, with eVTOL and humanoid robots opening up incremental space for solid-state batteries. 2. AI inference demand is accelerating, and this solution has become a focus for self-development among major cloud providers According to media reports, while GPUs have advantages in general-purpose accelerated computing scenarios, they face challenges such as high costs and power consumption in specific scenarios, prompting buyers to seek alternative types of chips for support. Customised ASIC chips have become a focal point of attention. Recently, NVIDIA introduced NVLink Fusion, directly targeting Broadcom's high-growth market: AI custom chips. This also means there are new entrants in the ASIC chip market. As AI models become increasingly powerful, the demand for AI inference is accelerating, with ASIC customised solutions offering better energy efficiency and cost advantages becoming a focus for self-development among major cloud providers, with upgraded versions typically released every 1-2 years. Guojin Securities believes that compared to GPUs, ASICs can be custom-developed for specific business scenarios, and the substantial demand for inference computing power and cost reduction will effectively drive the growth of ASIC demand. They are optimistic about ASIC design service companies, Ethernet white-box switch producers, Ethernet switching chip producers, AEC producers, and PCB producers. 3. Against the backdrop of strong supply constraints and a concentrated industry structure, these chemicals are currently in a price upcycle Institutions have pointed out that as temperatures rise, the demand for refrigerant maintenance is gradually becoming robust, with genuine sales boosting channel price confidence. Downstream air conditioner production schedules from June to August remain high on a YoY basis, with the demand side continuing to provide positive feedback. The long-term bullish trend for refrigerants remains unchanged. Against the backdrop of equal domestic and international trade quotes for mainstream refrigerants, the performance release certainty of refrigerant-related producers has strengthened. Founder Securities pointed out that refrigerants are one of the largest and most widely applied segments in the fluorochemical industry. The Montreal Protocol has driven the generational transition of refrigerants. Currently, the refrigerant industry is in a phase of accelerated reduction of second-generation refrigerants, quota freezing of third-generation refrigerants, and patent protection for fourth-generation refrigerants. Against the backdrop of strong supply constraints and a concentrated industry structure, second- and third-generation refrigerants are currently in a price upcycle. The downstream air conditioning and automotive industries are expected to maintain growth trends, with third-generation refrigerants expected to see both volume and price increases. In addition, fluorine-containing fine chemicals are a niche but high-quality segment within the fluorine chemical industry, characterized by high product barriers and added value, with significant growth in market demand in recent years. With the development of emerging industries such as new energy and electronics, their market size continues to expand. 4. Institutions Say Defense and Military Demand Expected to Recover, with Long-Term Growth Certainty in Relevant Sectors Research reports from institutions indicate that, as 2025 marks the final year of the "14th Five-Year Plan" and the planning year for the "15th Five-Year Plan," demand in the defense and military sector is expected to recover. Research reports from Northeast Securities point out that, at the current juncture, as the "14th Five-Year Plan" enters its final year, disruptive factors in the military industry have largely been eliminated, and downstream demand is showing restorative growth. Meanwhile, with the impending 2027 construction target, medium and long-term goals also provide clear guidance for the industry's development: to basically achieve the modernization of national defense and the military by 2035, and to comprehensively build the People's Liberation Army into a world-class military by 2050. Along with the recovery in demand and the gradual optimization of capacity structure, the defense and military sector is expected to see significant improvement, with high safety margins and long-term growth certainty.

On June 10, FAW Toyota officially put its all-new mid-size electric SUV, the bZ5, onto the market, unveiling four initial variants: the 550 JOY, the 550 PRO, the 550 PRO Smart Drive, and the 630 PRO, ...

In Q1, supported by the tight global supply of copper concentrates, the center of copper prices shifted significantly higher YoY, with the most-traded contract climbing to a historical high of RMB 83,320/mt.

In May, the copper market operated steadily, with SHFE copper prices fluctuating rangebound around 78,000 yuan/mt. The trends of LME copper and SHFE copper were generally similar, but LME copper outperformed SHFE copper, boosted by factors such as declining inventories and a weaker US dollar. The market focused on overseas macroeconomic data. In early May, the UK and the US reached an agreement on the terms of a tariff and trade deal, raising market expectations for an improvement in the global trade environment and leading to a slight rebound in the US dollar index. On May 12, the Ministry of Commerce issued a joint statement on the Sino-US Geneva Economic and Trade Talks, announcing that significant consensus had been reached in Sino-US trade negotiations. This progress significantly boosted market risk appetite, and copper prices strengthened temporarily as a result. In addition, the US Fed maintained its pause in interest rate cuts at its May policy meeting. Fed Chairman Powell stated that high tariffs could push up inflation and exacerbate pressure on the job market, and that the current monetary policy was in a moderately restrictive range, with a manageable outlook for underlying inflation, making it prudent to maintain a wait-and-see approach. Two days after the Fed announced its latest interest rate decision, several Fed officials reiterated the importance of controlling inflation expectations, believing that uncertainties in trade policy could lead to interest rates remaining elevated for a longer period. In mid-to-late June, the Fed's policy meeting will be held. According to the CME "FedWatch Tool," the probability of the Fed maintaining interest rates unchanged in June is 95.3%, with a 4.7% probability of a 25-basis-point cut. The probability of the Fed maintaining interest rates unchanged in July is 75.6%, with a 23.4% probability of a cumulative 25-basis-point cut and a 1.0% probability of a cumulative 50-basis-point cut. The impact of the US tariff policy on the market is gradually stabilizing, but the inflation concerns it has triggered and its potential impact on the economy will gradually emerge. Against this backdrop, the financial attributes of copper will continue to weaken. The shortage of raw materials intensified. In the week ending May 30, the processing fee for imported copper concentrates was reported at -$43.56/mt, further declining from -$42.61/mt at the end of April. Since turning negative on January 24 this year, the processing fee for imported copper concentrates has continued to fluctuate downward, reflecting persistent pressure on ore supply. In terms of copper scrap, the volume of copper scrap imported from the US has continued to decline since the beginning of this year. Although imports of copper scrap from Japan have increased somewhat, this has been insufficient to offset the decline in imports from the US. As copper prices struggle to rise and fail to stimulate the market to release more supply, it is expected that the volume of imported copper scrap will be difficult to rebound in June. Coupled with the resumption of production by some smelters after maintenance, the tight supply of copper scrap is expected to further intensify in June. According to SMM data, the operating rates of domestic copper smelters in China have generally shown an upward trend this year. However, around the delivery periods between months, a significant increase in market deliveries has led to a short-term accumulation of copper inventories at the SHFE. Due to limited inflows of imported supplies, the supply of copper cathode remains tight. Regarding domestic smelters, four smelters are scheduled for maintenance in June, involving the same crude and refined smelting capacity as in May. It is expected to affect production by 22,300 mt, a significant decrease compared to the impact of previous maintenance. Although the scale of planned maintenance at domestic smelters in Q2 gradually narrows in June, the pressure on raw material supply increases instead of decreasing, and the tight supply of copper cathode will persist in June. According to SMM data, the forecasted operating rate of domestic wire and cable enterprises in May was 84.66%, continuing to rebound from the April level. Demand side, power consumption has maintained a positive trend this year, with overall stable demand from the real estate sector. Notably, since the start of Q2, both newly started and completed construction areas in real estate have rebounded. However, wire and cable enterprises engaged in concentrated procurement of raw materials when copper prices fell in April, and now the inventory of copper rod raw materials has once again accumulated to a high level. Therefore, despite the rebound in demand from the wire and cable sector, the transmission of demand still lags behind. The production and sales of the air conditioning industry exhibit distinct seasonal characteristics. In June, enterprises have entered a downward production cycle, with production and sales activities set to contract further, and their boosting effect on copper demand will also weaken accordingly. The automotive industry is in a phase of seasonal rebound, with NEV production continuing to accelerate. Coupled with positive sales performance this year, the industry's copper demand will steadily rebound. In summary, copper prices will continue to fluctuate at highs in June. (Source: Futures Daily)

In Q1 this year, supported by the tight global supply of copper concentrates, the center of copper prices shifted significantly higher compared to last year, with the most-traded contract climbing to a historical high of 83,320 yuan/mt. However, during the domestic Qingming Festival holiday, affected by the US's "reciprocal tariff" policy, copper prices plummeted, falling to a low of 71,320 yuan/mt, a drop of 12,000 yuan/mt from the year's peak, representing a decline of over 14%. Looking ahead, the center of copper prices is expected to move further downward. Supply side, with the expansion of the Kamoa and Oyu Tolgoi mines and the commissioning of the new Malmyz mine, global copper mine production is expected to grow by 2.3% in 2025. Meanwhile, the continuous expansion of China's capacity, along with the start-up of new capacities in Indonesia, India, and the DRC, will ultimately drive a 2.9% YoY increase in copper cathode production in 2025. Despite the simultaneous growth in copper mine and copper cathode capacities, the tight global supply of copper concentrates is expected to persist. Currently, copper concentrate treatment charges (TCs) have remained in negative territory for multiple months. As of May 23, spot TCs fell to -$44.25/dmt. In May, the cost of producing copper cathode from copper concentrates exceeded the domestic spot price by 4,705-5,455 yuan/mt. When considering the profit from sulphuric acid sales, the domestic sales loss for copper cathode narrowed to -3,266 to -2,516 yuan/mt. Long-term contract TCs remained at $23.25/dmt. After accounting for the profit from sulphuric acid sales, the domestic sales loss for copper cathode ranged from -2,751 to -700 yuan/mt. The fact that the production cost of copper cathode exceeds the domestic selling price, on one hand, supports copper prices from the cost side; on the other hand, it may dampen the production enthusiasm of smelters, constraining a significant increase in copper cathode production. Previously, influenced by changes in the market supply-demand pattern, the domestic import window for copper cathode closed, while the export window opened. Domestic smelters actively expanded export trade to secure profits. Data shows that in April, domestic copper cathode exports increased by approximately 10,000 mt MoM, while net imports decreased by 15,000 mt MoM. Coupled with the sufficient supply of copper concentrates and the increase in smelters' operating rates, copper cathode production increased by approximately 10,000 mt MoM in April. From the perspective of raw material reserves, domestic imports of copper concentrates, copper scrap, and copper anode increased MoM in April, laying the foundation for production in May. Entering May, with the continuous opening of the export window for copper cathode and the scale of production resumptions at copper cathode enterprises exceeding that of maintenance, domestic copper cathode production is expected to remain at a high level. Driven by the US's tariff reduction policy, the country's imports of copper products have increased significantly. Data shows that the US's imports of copper cathode in January, February, and March were 58,000 mt, 76,000 mt, and 123,000 mt, respectively. In April, imports exceeded 170,000 mt, hitting a record high. UBS analysts expect that approximately 250,000 to 300,000 mt of additional copper will flow into the US market between March and May, indicating that the US refined copper imports in H1 have nearly reached the full-year level of 2023. Against the backdrop of a surge in US copper product imports, China has emerged as the primary supplier, leveraging its cost and capacity advantages, driving up domestic demand for copper semis exports. In April, exports of unwrought copper and copper semis increased by nearly 10,000 mt month-on-month (MoM), while imports either decreased or slowed down in growth MoM, resulting in a 40,000 mt decline in net imports. Despite robust export demand, the characteristics of the off-season for domestic downstream copper enterprises began to emerge in the last week of May. SMM survey data shows that the weekly operating rates of copper cathode rod, secondary copper rod, wire and cable, and enamelled wire enterprises were 70.64%, 22.14%, 82.34%, and 83.90%, respectively, decreasing by 2.62 percentage points, increasing by 0.27 percentage points, decreasing by 1.05 percentage points, and decreasing by 0.50 percentage points MoM. Among them, copper consumption in the air conditioning and new energy sectors both decreased MoM. Specifically, the total production schedules for household air conditioners in China for May, June, and July were 23.3 million units, 20.978 million units, and 18.4206 million units, respectively, showing a month-on-month decline. In the NEV market, retail sales from May 1 to 26 reached 574,000 units, up 2% MoM from April, while nationwide passenger vehicle producers' new energy wholesale sales reached 620,000 units, down 3% MoM from April. The trend of global copper inventories continuing to shift towards the US is significant. As of May 29, SHFE and LME copper warrants decreased to 32,000 mt and 152,000 mt, respectively, with MoM declines of 6% and 25%. As of May 28, COMEX copper inventories increased to 179,700 mt, up 37% MoM. This data change reflects that copper inventories are shifting from the Asian and European markets to the US market. Looking ahead, although the early release of future demand for US imports has provided short-term support for copper prices, copper prices still face downward risks amid intensified volatility in the US and Japanese stock, bond, and currency markets, as well as the gradual entry of the domestic copper market into the off-season for purchases and sales. (Source: Futures Daily)