[SMM Analysis: When It Rains, It Pours - Global Copper Concentrates Supply-Demand Balance After the Earthquake at KK Mine] At the end of May, Chinese smelters and Antofagasta commenced mid-year negotiations. In the first round of negotiations this year, miners had already offered a midpoint price of -US$15 to the smelters. This figure was significantly lower than the US$0/dmt that had circulated in the market in late April. According to SMM, many raw material procurement teams from leading smelters in the CSPT group indicated that the negotiations were fraught with difficulties, and it was exceptionally challenging to secure a favorable figure.

[SMM Analysis:When it rains, it pours: Global copper concentrate supply-demand balance results after KK Mine earthquake ] At the end of May, Chinese smelters started mid-year negotiations with Antofagasta. In the first round of negotiations this year, mining companies have offered smelters a quotation with -$15 , which is far lower than the $0 leaked by the market in late April. According to SMM, many raw material procurement teams from leading smelters in the CSPT group stated that this negotiation is extremely difficult, and it is arduous to strive for a favorable figure.

The London Metal Exchange (LME) announced that it has approved four LME-approved warehousing facilities located in Hong Kong. Previously, the LME had approved Hong Kong as an LME delivery location on January 20, 2025. LME CEO Bai Lian Zhang stated: "Following the announcement of Hong Kong as an LME delivery location, the rapid approval of the first batch of warehousing facilities is an exciting development for the LME. We sincerely thank the warehousing companies and partners for their strong support, as well as the metal industry's keen interest in LME's Hong Kong warehousing business." "Hong Kong is now fully equipped to further develop into a major global metal market, while serving as the best gateway for enterprises to enter the mainland China market. This will further consolidate Hong Kong's important position as an international financial, trade, and logistics hub." Details of the warehousing facilities approved today (including the warehousing operators, their local partners, and the approved metals for storage) are as follows: GKE Metal Logistics Pte Ltd (local partner: China Resources Logistics (Yuen Fat Wharf & Godown) Limited) -- aluminum alloy, primary aluminum, copper, nickel, lead, tin, and zinc (with two approved warehousing facilities) Henry Diaper & Co. Ltd (local partner: Sinotrans (HK) Warehousing Limited) -- aluminum alloy, lead, tin, and zinc PGS (East Asia) Pte Ltd (local partner: SF Supply Chain (Hong Kong) Limited) -- aluminum alloy, primary aluminum, copper, nickel, lead, tin, and zinc The new approved warehousing facilities have passed the LME transportation and logistics standards and are expected to officially commence operations in three months, starting to receive and store LME-approved delivery brand metals.

SMM Commentary: "Reciprocal Tariffs" Exceed Expectations, Driving Down Copper Prices; Can Continued Inventory Decline Bring a Turnaround to the Copper Market? On April 2, Trump announced "reciprocal tariffs," the scale of which exceeded market expectations, intensifying concerns over the risk of "stagflation" in the US economy and the escalation of global trade conflicts. This has cast a shadow over the demand prospects for non-ferrous metals such as copper. On April 3, copper futures across the three major exchanges all declined. As of 15:08 on April 3, LME copper fell by 2.25% to $9,502.5/mt, with its weekly decline temporarily at 2.98%; SHFE copper dropped by 1.28% to 78,860 yuan/mt.

【Futures Market Review】The SHFE copper index opened lower and closed higher on Tuesday, settling at 80,300 yuan/mt, with spot premiums in Shanghai at 10 yuan/mt. 【Industry Performance】According to industry insiders, the China Smelters Purchase Team (CSPT) held its quarterly meeting today (March 31) and decided not to set a spot purchase guidance price for copper concentrate TCs/RCs for Q2 2025. The spot purchase guidance TCs/RCs for copper concentrates finalized in Q1 this year were $25/mt and 2.5¢/lb. 【Core Logic】Copper prices recently jumped initially and then pulled back, exceeding expectations. The main reason for the volatility in copper prices remains the anticipated US copper tariffs. Bloomberg recently reported that major commodity traders, including Trafigura Group, Glencore Group, and Gunvor Group, are diverting large quantities of copper originally destined for Asia to the US. Some insiders stated that due to the massive volume, traders had to book additional storage space in New Orleans and Baltimore to accommodate these shipments. Energy trader Mercuria estimates that approximately 500,000 mt of copper is en route to the US, significantly higher than the normal monthly import volume of around 70,000 mt. The pullback in copper prices is mainly attributed to the reduction in long positions, with overall open interest in SHFE copper decreasing from 610,000 to 570,000 lots. In the short term, the potential implementation of US tariff policies may cause further volatility in copper prices. Longs may gradually unwind their positions due to the tariff policies, thereby pulling prices lower. Additionally, the price spread between US copper and LME copper may gradually narrow as tariffs are implemented. (Source: Nanhua Futures)

Today, the international copper 2505 contract opened at 71,080 yuan/mt, closing in the green, primarily driven by short position reductions. Overnight, the most-traded international copper contract opened with a rapid decline, hitting a low of 70,650 yuan/mt before rebounding, fluctuating considerably around the daily average line. After the daytime opening, the center of copper prices fluctuated upward, continuing to rise in the afternoon and reaching a high of 71,550 yuan/mt before closing at 71,450 yuan/mt, down 0.04%. The trading volume was 8,020, and the open interest reached 7,702 lots, a decrease of 568 lots from the previous trading day. Macro-wise, the uncertainty surrounding US tariff policies has created a cautious sentiment in the market, with concerns that US tariffs could harm the global economy. Meanwhile, the CSPT meeting did not announce further production cut plans, leading to a downward fluctuation in copper prices. Domestically, the manufacturing PMI continued to rise, remaining in expansion territory for two consecutive months, providing bottom support for copper prices. Attention is focused on tomorrow's news regarding US tariff policies. The SHFE copper 2505 contract closed at 80,430 yuan/mt. Based on the international copper 2505 contract's price of 71,450 yuan/mt, its post-tax price is approximately 80,739 yuan/mt. The price spread between the SHFE copper 2505 contract and the international copper 2505 contract was -309 yuan/mt, maintaining an inverted spread and narrowing compared to the previous trading day.

(1) China's official manufacturing PMI for March was 50.5, up from the previous reading of 50.2, marking the fastest expansion pace in a year. (2) The White House announced that the US President will decide on the final tariff policy on April 2, and the reciprocal tariff plan will not include any exemption clauses. (3) As of Monday, March 31, SMM copper inventories increased by 2,700 mt WoW to 337,200 mt. Total inventories were 54,000 mt lower YoY compared to 391,200 mt. (4) SMM China's copper cathode production in March increased by 63,900 mt MoM, up 6.04%, and rose 12.27% YoY. Cumulative production from January to March increased by 274,500 mt YoY, up 9.4%. (5) On March 31, #1 copper cathode in east China was quoted at a premium of 15, up 20 WoW; spot cargo in south China was quoted at a premium of 10, down 50 WoW; spot cargo in north China was quoted at a discount of 130, up 30 WoW. (6) LME copper fell 0.96% to $9,690/mt. The US President will decide on the final tariff policy on April 2, and the market has entered a risk-averse mode, with the gold-to-copper ratio rising significantly. China's March manufacturing PMI continued to rebound, and the new orders index rose driven by pre-tariff exports. However, the market remains somewhat concerned about the sustainability of the post-tariff economic momentum. From a fundamental perspective, domestic copper cathode production in March remained higher than expected, increasing by over 60,000 mt MoM. The CSPT did not set a Q2 guidance price for spot copper concentrate purchases, but there was no discussion of joint production cuts, which was slightly below expectations. After the center of copper prices shifted downward, downstream buyers made some purchases, but copper inventories still built up over the weekend. Spot market trading was relatively mediocre yesterday, with downstream players mainly adopting a cautious wait-and-see approach. Strategy recommendation: The market is heavily risk-averse, and SHFE copper's closing price has fallen below the MA20. Early long positions should be exited to prevent macro risks from expanding. Focus on the support level at 79,500, and temporarily adopt a wait-and-see approach, looking for opportunities to re-enter the market after the price stabilizes. (Source: Zhongzhou Futures)

SMM Morning Meeting Summary: Copper Prices Slightly Declined Overnight, Market Sentiment Remains Cautious. On March 31, spot prices of #1 copper cathode against the SHFE copper 2504 contract were reported at parity to a premium of 30 yuan/mt, with an average premium of 15 yuan/mt, up by 20 yuan/mt compared to the previous trading day. According to SMM, domestic social inventory of copper cathode continued to experience a slight buildup over the past weekend, with the increase mainly concentrated in Guangdong. Attracted by the high premiums in Guangdong, some smelters increased shipments to South China, while east China continued to see destocking.

Copper Morning Brief: The uncertainty of US tariff policies has led to a cautious sentiment in the market, with concerns that US tariffs may harm the global situation. Meanwhile, no further production cut plans were announced at the CSPT meeting, causing copper prices to fluctuate downward. Domestically, the manufacturing PMI continued to rise, remaining in the expansion territory for two consecutive months, providing bottom support for copper prices.

Copper Morning Briefing: The uncertainty of US tariff policies has led to a cautious sentiment in the market, with concerns that US tariffs may harm the global situation. Meanwhile, no further production cut plans were announced at the CSPT meeting, causing copper prices to fluctuate downward. Domestically, the manufacturing PMI continued to rise, remaining in the expansion territory for two consecutive months, providing bottom support for copper prices.