On April 10th, the copper futures market showed an upward trend. Shanghai copper futures opened higher and advanced; the main contract, 2605, opened at 97,820 yuan per ton, reached a high of 98,750 yuan, a low of 97,720 yuan, and settled at 98,440 yuan, up 560 yuan or 0.57% from the previous settlement price of 97,880 yuan. The total trading volume for the 2605 contract decreased by 8,202 lots to 71,304 lots, while open interest fell by 387 lots to 174,447 lots. During the Asian trading session, LME copper experienced wide fluctuations, with the latest quote at $12,710 per ton as of 15:08 Beijing time, up $14.5 or 0.11%.
According to price statistics, domestic spot copper prices increased. The Yangtze River spot price for 1# copper was quoted at 98,450 yuan per ton, up 730 yuan, with a premium of 180-220 yuan, up 20 yuan. The composite Yangtze River price for 1# copper was 98,395 yuan per ton, up 730 yuan, with a premium of 90-200 yuan, up 20 yuan. The Guangdong spot price for 1# copper was 98,410 yuan per ton, up 730 yuan, with a premium of 60-260 yuan, up 20 yuan. The Shanghai spot price for 1# copper was 98,320 yuan per ton, up 720 yuan, with a premium of 30-110 yuan, up 10 yuan.
From a macroeconomic perspective, the ceasefire agreement between the US and Iran significantly eased market risk aversion, leading to a rebound in global risk assets, with Asian equities leading the gains and potentially recording their largest weekly increase since November 2022. However, inflationary pressures persist. Surveys indicate that due to geopolitical conflicts driving up oil prices and tariff effects, the US March CPI is expected to increase by 0.9% month-on-month, the highest in nearly four years, with a year-on-year rise to 3.3%.
In contrast, domestic economic data released positive signals: China's March PPI returned to positive year-on-year growth of 0.5% after 11 months, with a month-on-month increase of 1.0%, indicating a recovery in demand for industrial goods. Although the CPI fell 0.7% month-on-month due to post-holiday seasonal factors, it maintained a moderate year-on-year increase of 1.0%. The divergence in domestic and international macroeconomic environments has injected optimism into the domestic market.
On the fundamental side, the copper market's "weak supply, strong demand" dynamic remains firm. On the supply side, frequent strikes and force majeure events at overseas mines have caused production disruptions, while domestic spot treatment charges for copper concentrate continue to hit new lows, further confirming extreme tightness in raw material supply and building a solid floor for copper prices. Inventory data shows a clear destocking trend, with LME inventories falling to 383,500 tons and SHFE warehouse receipts dropping to 179,800 tons. Although profits from by-product sulfuric acid have alleviated pressure on smelters to reduce output, their active procurement of raw materials to ensure production has instead accelerated the drawdown of social inventories. On the demand side, the traditional "Silver April" peak season effect is materializing, with consumption showing moderate improvement. Operating rates for refined copper rod, cable, and copper tube enterprises remain high, with the refined copper rod operating rate exceeding 80%. Orders are sufficient, with some enterprises even experiencing production unable to keep up with shipments, and faster downstream pickup rates are effectively boosting consumption expectations.
Spot market trading was mixed. Encouraged by the rising futures prices, holders were more willing to sell and realize profits. Although downstream enterprises, expecting further price increases, entered the market to restock, traders generally offered lower prices and purchased cautiously due to fear of high prices. This resulted in downstream demand alone being insufficient to fully absorb the circulating supply, leading to a slightly oversupplied market. In late trading, as futures prices continued to strengthen, holders' willingness to hold out for higher prices increased, but buying interest nearly vanished, resulting in few transactions and overall lackluster trading activity.
In summary, analysis indicates that current copper prices are caught in a tussle between macroeconomic pressures and fundamental support. On one hand, high US inflation reinforces the Federal Reserve's hawkish stance, keeping the US dollar index elevated and putting downward pressure on copper prices; while geopolitical tensions have temporarily eased, uncertainties remain. On the other hand, positive domestic economic data, a accommodative policy tone, and continuously improving fundamentals provide strong upward momentum for copper prices. It is anticipated that after digesting macroeconomic pressures, copper prices still have the potential to move higher. Support is seen around 97,500 yuan per ton, while a key resistance level to watch is the 100,000 yuan per ton mark.
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