A short review of the Yangtze River copper price indicates that the failure to extend a ceasefire agreement and the US seizure of an Iranian oil tanker have heightened geopolitical tensions. Overnight, London copper closed down 0.68%. Despite China's refined copper output hitting a monthly peak in March, declining inventory levels continue to provide support, suggesting spot copper prices today may experience volatility as market forces contend.
In the copper futures market, the aforementioned geopolitical tensions caused overnight London copper prices to plunge sharply from highs, closing in negative territory. The latest closing price was $13,155 per tonne, down $90, or 0.68%. Trading volume decreased by 2,713 lots to 15,384 lots, while open interest fell by 1,632 lots to 279,345 lots. In evening trading, Shanghai copper futures rose initially, fluctuated, then trended lower, consolidating within a narrow range. The most active June 2606 contract settled at 102,100 yuan per tonne, down 240 yuan, or 0.23%.
The London Metal Exchange (LME) reported copper inventory levels on April 21st at 398,575 metric tonnes, an increase of 150 tonnes, or 0.04%, compared to the previous trading session.
According to the Yangtze River Nonferrous Metals Network, the Shanghai copper June 2606 contract opened lower in early trading today at 102,590 yuan per tonne, down 100 yuan.
From a macroeconomic perspective, geopolitical tensions provided a temporary scare, while policy expectations were disappointed. US-Iran tensions saw a dramatic turn just before the ceasefire expiration. The US President, responding to a Pakistani request, announced a delayed strike and extended the ceasefire but maintained a naval blockade for pressure. Iran's response was lukewarm, with Tasnim News Agency stating no active request for an extension was made, leaving market expectations for de-escalation cautious. This 'maximum pressure' scenario, while not triggering immediate war panic, has not fully dissipated geopolitical risk premiums.
Concurrently, the Federal Reserve Chair nominee emphasized monetary policy independence during hearings, offering no signals of the market-anticipated easing. This, combined with a stronger US Dollar, pressured dollar-denominated metals. Domestically, macro conditions showed resilience. First-quarter value-added output for raw material industries grew 4.6% year-on-year, and the Ministry of Industry and Information Technology clarified plans to advance computing infrastructure and power-computing coordination, providing policy support for long-term demand for copper as a key conductive material.
On the supply and demand fundamentals, a dichotomy exists: intensified overseas disruptions alongside record domestic output. Overseas, Rio Tinto's Q1 copper production rose to 229,000 tonnes, aided by the Oyu Tolgoi mine. However, planned extended maintenance shutdowns at Zambia's Mopani and Chambishi smelters, coupled with sulfuric acid supply risks from the Strait of Hormuz blockade, continue to threaten overseas refined copper output. Domestically, the spot TC index for copper concentrate remains at historically low levels, indicating persistent tightness in mine supply.
Notably, China's refined copper output in March reached a record high of 1.33 million tonnes, with cumulative Q1 output up 9.3% year-on-year, primarily driven by profits from by-products due to soaring sulfuric acid prices. Despite the surge in production, domestic social inventories continued to decline, indicating some resilience in seasonal consumption. However, high copper prices are clearly dampening downstream acceptance, with spot market purchases mostly for immediate needs and limited capacity to absorb high prices.
From a technical perspective, the 60-minute MACD indicator shows its lines below the zero axis with initial red bars appearing, suggesting short-term downward momentum is weakening but a strong reversal signal has not yet formed. Amid intertwined bullish and bearish factors, copper prices are likely to maintain a high-volatility pattern.
For trading strategy, a light position approach with short-term buying on dips is suggested, focusing on support near the 102,000 yuan/tonne level. Given fluctuating macro sentiment and geopolitical uncertainty, strict control over position sizing and trading rhythm is essential, avoiding chasing rallies. Should US-Iran tensions deteriorate substantially or the US Dollar Index strengthen further, timely adjustment of stop-losses is advised.
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