SMM Morning Meeting Minutes: Overnight, LME copper opened at $12,960/mt. It fluctuated downward in early trading, dipping to $12,792/mt, after which the center of copper prices gradually moved higher and touched a high of $12,966/mt. It then fluctuated downward and finally closed at $12,859/mt, down 1.29%. Trading volume rose to 27,900 lots, and open interest rose to 305,000 lots, down 953 lots from the previous trading day, mainly due to long position reductions. Overnight, the most-traded SHFE copper 2604 contract opened at 100,440 yuan/mt. It fluctuated downward in early trading and bottomed at 100,030 yuan/mt, after which the center of copper prices moved sharply higher and climbed to 101,410 yuan/mt. It finally closed at 100,980 yuan/mt, down 0.35%. Trading volume rose to 74,300 lots, and open interest rose to 195,000 lots, down 5,732 lots from the previous trading day, mainly due to long position reductions.

Copper prices fluctuated downward this week. Early in the week, as the situation in the Middle East continued to escalate, expectations of a US-Iran conflict intensified. Risk-off sentiment rose, the US dollar index strengthened, and funds rotated back from risk assets. LME copper pulled back from around $13,400 to the $13,000 level, while SHFE copper also pulled back from above 103,000 yuan to around 101,000 yuan. Although the situation was briefly digested by the market and a short-lived pullback in the US dollar drove a technical rebound in copper prices, overall momentum remained limited. US ADP employment data came in better than expected; divisions within the US Fed over interest rate cuts persisted; and the White House’s nomination of Warsh as Fed Chairman also increased policy uncertainty. In terms of positioning, bulls reduced positions for several days, indicating continued exits by high-level funds. Overall, macro uncertainty and a stronger US dollar capped the rebound in copper prices, and prices remained in the doldrums in the short term. Fundamentals, as the market held expectations for higher sulphuric acid prices, the transaction center for copper concentrates was pushed further lower. Recent mine tender prices pointed to a midpoint of -$50/mt. Smelting pressure increased further. For copper cathode, post-holiday inventory buildup continued, and consumption remained sluggish with no sign of a destocking inflection point. LME, COMEX, and SHFE all showed a contango structure, leaving fewer trading opportunities. Looking ahead to next week, geopolitical tensions are expected to continue providing strong support to the US dollar, leaving copper prices facing significant resistance in the short term. Coupled with the current high-inventory fundamentals, an upside move will be difficult. LME copper is expected to fluctuate between $12,800-13,200/mt, and SHFE copper between 98,000-101,000 yuan/mt. In the spot market, as delivery approaches, spot market trading logic will fluctuate with the price spread between futures contracts and funding costs, and is expected to gradually lift next week. Spot prices against the SHFE copper front-month contract are expected to range from a discount of 120 yuan/mt to a premium of 20 yuan/mt.

In February 2026, the operating rate of secondary copper rod was 7.98%, above expectations of 7.46%, down 9.7 percentage points MoM and down 23.72 percentage points YoY. In February 2026, China’s secondary copper rod market, jointly driven by the Chinese New Year holiday and policy uncertainty, went through a full cyclical evolution of “pre-holiday volatility and positioning...

This week, prices of 304 stainless steel scrap off-cuts in east China strengthened to 10,200-10,300 yuan/mt; stainless steel scrap off-cuts of the same grade in Foshan rose, with a price range of 9,900-10,200 yuan/mt. From the perspective of raw material-side production costs, the current cost of producing stainless steel entirely with stainless steel scrap was about 14,127.63 yuan/mt, while the production cost using only high-grade NPI was 14,789.63 yuan/mt. This week, stainless steel scrap prices strengthened and moved higher, mainly supported by the recovery in restarts, catch-up demand, and cost advantages. Entering March, the market fully resumed operations, yard shipments accelerated, and downstream inquiries and transactions increased significantly, lifting trading activity and laying the groundwork for prices to rise. On the futures and raw material side, SS futures saw a pause in gains this week, stainless steel spot prices posted limited increases, the pace of high-grade NPI price hikes slowed, and heat in the raw material market cooled. However, stainless steel scrap had previously been affected by the Chinese New Year holiday, and prices failed to keep pace; this week’s catch-up rally became the key driver of the price strength. In terms of supporting factors, stainless steel mills’ March production schedules rose sharply, boosting stainless steel scrap procurement demand; coupled with expectations for the “Golden March and Silver April” peak season, bullish sentiment was strong. Meanwhile, stainless steel scrap’s economic advantages over high-grade NPI were evident, lifting substitution demand and further supporting prices. However, downstream end-use demand recovered slowly, and stainless steel finished product inventory remained high, suppressing upward movement in finished product prices and transmitting to the stainless steel scrap market, thereby limiting the increase. Overall, the market this week showed a pattern of “restart recovery, increased transactions, and a catch-up price rise.” In the short term, there was still upward momentum, but gains were limited; over the longer term, attention should be paid to the pace of end-use demand recovery.

Today, the most-traded BC copper 2604 contract opened at 89,120 yuan/mt. Early in the session, the center maintained a fluctuating downward trend, hit bottom at 88,620 yuan/mt, then fluctuated upward to a high of 90,020 yuan/mt, and finally closed at 89,530 yuan/mt, down 0.41%. Open interest fell to 6,039 lots, down 89 lots from the previous trading day, while trading volume fell to 4,556 lots, down 1,782 lots from the previous session. On the macro front, Iran said it was willing to abandon its nuclear program in exchange for a “satisfactory alternative” from the US, while also cracking down on separatist forces at home; meanwhile, the US military was reported to have begun preparations for actions against Iran that could last through September. Trump explicitly opposed Khamenei’s son succeeding as Supreme Leader and encouraged the Kurds to pressure Iran, saying that although Iran was trying to seek an agreement, it had missed its chance. The escalation in the Middle East again pushed risk-off sentiment higher, the US dollar index strengthened again, and this was bearish for copper prices. On the fundamentals side, imported supply continued to arrive, and with domestic social inventory at a high level, overall market circulating supply remained ample. Demand side, enterprises resumed work and production, and together with the pullback in copper prices, downstream purchase willingness continued to recover. The SHFE copper 2604 contract closed at 101,050 yuan/mt. Based on the BC copper 2604 contract at 89,530 yuan/mt, its after-tax price was 101,169 yuan/mt. The price spread between the SHFE copper 2604 contract and BC copper was -119 yuan/mt. The spread remained in backwardation and narrowed somewhat from the previous day.

[SMM Shanghai Spot Copper] Looking ahead to next week, spot discounts for Shanghai spot copper are expected to continue a steady recovery. From the market structure perspective, the price spread between futures contracts for the next-month C contract remained around 300 yuan/mt, prompting suppliers to hold prices firm and withhold sales. Meanwhile, the downward shift in the center of copper prices effectively stimulated downstream purchase willingness, driving a notable rise in spot premiums. Supply side, domestic copper and previously price-locked imported cargo continued to arrive, and with social inventory at elevated levels, overall circulating supply in the market remained ample. Under the combined effects of suppliers holding prices firm and downstream buying the dip, the momentum for the recovery in spot discounts is expected to continue.

This week (February 27–March 5), the operating rate of SMM copper wire and cable enterprises was 60.9%, an increase of 33.17 percentage points MoM and up 3.79 percentage points from the second week after work resumption last year on a YoY basis. This week, wire and cable enterprises had basically fully resumed operations, and production continued to recover. Demand side, power grid orders placed in a concentrated manner before the holiday entered a concentrated delivery period, accelerating enterprises’ production pace. In addition, after the Lantern Festival, workers gradually returned to their posts, and engineering and market orders were also gradually released. Inventory side, driven by restocking on the copper price pullback and production preparation, enterprises’ raw material inventory increased 7.01% MoM; finished product inventories fell 5.7% MoM, mainly because downstream players resumed operations after the holiday and gradually began to pick up goods, accelerating the drawdown of finished product inventories. Looking ahead to next week, as downstream ordering and cargo pick-up progress accelerates and enterprises fully resume production, SMM expects the operating rate of copper wire and cable to increase 5.21 percentage points MoM to 66.1% next week (March 6–March 12).

Today, in North China, spot #1 copper cathode prices against the front-month contract were at a discount of 250–130 yuan/mt. The average premium/discount rose by 90 yuan/mt from the previous trading day, while the average transaction price was 100,845 yuan/mt, down 455 yuan/mt from the previous trading day.

[SMM Cast Aluminum Alloy Morning Comment: Overseas ADC12 Prices Surged to USD 3,200, with Import Losses Expanding Sharply] In the overnight session, the aluminum alloy 2604 contract in the night session moved downwards after a higher opening and fluctuated downward. After opening at 23,295 yuan/mt, it rose to 23,420 yuan/mt, then continued to pull back, dipping to a low of 23,000 yuan/mt, and closed at 23,170 yuan/mt in late trading, down 1.07% from the previous close. Open interest continued to decline, with bulls clearly reducing positions; trading volume edged up, and the price center moved lower.

[SMM Analysis]Macro Factors Drove, and Supply and Demand Gradually Recovered,ADC12 Prices Were Expected to Rise in March