According to foreign media reports, as the ongoing escalation of geopolitical conflict in the Middle East disrupted navigation through the Strait of Hormuz, shipments of aluminum products in the region had “stalled.” Mercuria Energy Group, the world’s largest independent integrated energy and commodities trading house, was expected to urgently withdraw nearly 100,000 mt of aluminum from London Metal Exchange (LME) warehousing facilities to ease the supply gap in European and US markets. Three sources familiar with the matter revealed that Switzerland-based Mercuria had on Monday canceled warrants for, or earmarked for delivery, nearly 100,000 mt of aluminum stored in LME-approved warehouses at Port Klang. Mercuria has so far declined to comment on the move.

In the morning session, copper prices in COMEX, LME, and SHFE markets surged consecutively. The "tariff turmoil" remains unresolved, and COMEX gold repeatedly hit new highs, with copper prices following suit. LME canceled warrants were injected into COMEX warehouses. Despite COMEX inventory surpassing 100,000 short tons, COMEX copper prices showed a three-day winning streak. As the LME February date approaches, a large number of bears rolled over positions from February to March, causing the structure between February and March LME copper to plummet from around a $36/mt contango on February 13 to nearly $0/mt, with the price spread almost flattening. Notably, the SHFE copper 2502 contract saw import losses expand to over 900 yuan/mt, and Chinese smelters may begin to explore export opportunities. Attention should be paid to changes in LME inventories in the Asian region and their impact on the recovery of total inventory.

[SMM Morning Meeting Summary: Easing US-China Trade War Concerns, US Dollar Index Plunges, Bullish for Copper Prices] On January 20, #1 copper cathode spot prices against the SHFE 2502 contract were quoted at a premium of 40-90 yuan/mt, with an average premium of 65 yuan/mt, down 20 yuan/mt from the previous trading day. According to SMM, last weekend saw continued destocking in the Shanghai region, with limited arrivals of domestic supplies and only regular imports...

[SMM Spot Copper] During the day, mainstream standard-quality copper was quoted at a premium of 40 yuan/mt to 60 yuan/mt against the front-month contract, while high-quality copper was quoted at a premium of 60 yuan/mt to 90 yuan/mt. According to SMM, there was continuous destocking in the Shanghai region over the weekend, with limited arrivals of domestic supply. On the import side, apart from regular port arrivals, only some LME canceled warrants were shipped to east China. In terms of demand, pre-holiday downstream consumption remained sluggish, with moderate restocking sentiment. Spot premiums are expected to decline further tomorrow.

[SMM Spot Copper] During the day, mainstream standard-quality copper was quoted at a premium of 40 yuan/mt to 60 yuan/mt against the front-month contract, while high-quality copper was quoted at a premium of 60 yuan/mt to 90 yuan/mt. According to SMM, continuous destocking occurred in the Shanghai region over the past weekend, with limited arrivals of domestic supplies. On the import side, apart from regular port arrivals, only a portion of LME canceled warrants was shipped to east China. In terms of demand, downstream consumption remained sluggish before the holiday, with moderate restocking sentiment. Spot premiums are expected to decline further tomorrow.

In recent days, there has been a surge in attacks on vessels in the Red Sea, prompting several international shipping companies to announce the suspension of operations in the area.