Good morning. Here are the key updates.
Israel and Lebanon Hold New Round of Talks in the US According to reports, Israel and Lebanon held a new round of peace talks in Washington, D.C., on the morning of May 14 (local time).
An unnamed Israeli government official stated the talks were held at the US State Department. The Israeli delegation was led by Israeli Ambassador to the US, along with senior security officials. The Lebanese delegation included the Lebanese Ambassador to the US and a former Lebanese ambassador to the US.
The Israeli official said this round of talks aims to disarm the Lebanese group Hezbollah and reach an agreement to establish formal diplomatic relations with Lebanon. Israel wishes to retain the freedom to conduct aerial and ground military strikes against Hezbollah before any agreement is reached, while Lebanon demands that Israel withdraw its troops from Lebanese territory, cease attacks on Lebanon, and stop damaging villages on the Lebanese side near the temporary border.
The official added that talks are expected to continue on the 15th, but it remains unclear if the two sides are close to an agreement.
Late on the 14th, the Israel Defense Forces issued a statement saying that over the past 24 hours, its forces continued operations in southern Lebanon, striking over 65 Hezbollah infrastructure targets, including weapons storage facilities, outposts, command centers, and other infrastructure used to plan and launch attacks against Israel. More than 20 Hezbollah fighters were reportedly killed in the operations.
Hezbollah has not yet responded.
Israeli Defense Minister: May Need to Resume Military Action Against Iran Soon Israeli Defense Minister stated on the 14th that Israel is prepared for the possibility that it may soon need to resume military action against Iran.
Speaking at a war memorial ceremony, the minister said, "Our mission is not yet complete. We must achieve the objectives of this campaign to ensure that Iran does not pose an existential threat to Israel for generations to come, nor a threat to American forces."
He indicated that Israel "may soon need to act again to ensure these goals are achieved."
Ukrainian Capital Kyiv Hit by Airstrikes, Death Toll Rises to 12 Ukraine's State Emergency Service reported on social media on the 14th that Russia launched a large-scale airstrike on the Ukrainian capital Kyiv, resulting in at least 12 deaths. Rescue workers are still conducting search and rescue operations in the rubble of buildings.
The Mayor of Kyiv stated that Russian forces used drones and missiles in the large-scale attack on Kyiv that morning. According to Ukrainian medical authorities, the Russian attack has killed 12 people and injured 57, with 27 hospitalized.
Ukrainian President posted on social media that Ukraine is investigating in detail what weapons Russia used in the attack. Preliminary information indicates that a building in Kyiv was hit by a Kh-101 missile.
The Russian Defense Ministry issued a statement on social media on the 14th, saying that over the past day, Russian forces carried out large-scale strikes on Ukrainian defense industry enterprises, energy and transportation facilities used by the Ukrainian military, in response to Ukrainian attacks on Russian civilian targets.
Cuban Government: Cuban Interior Ministry Officials Meet with CIA Director The Cuban government issued a statement on the 14th saying that CIA Director visited Havana that day and held a meeting with officials from the Cuban Interior Ministry.
The statement said the visit was at the request of the US government. The Cuban leadership approved the visit and arranged for him to meet with his counterparts at the Cuban Interior Ministry. This contact took place against the complex backdrop of current Cuba-US relations, aiming to promote political dialogue between the two countries and jointly address the current situation. Cuba reiterated during the meeting that it does not pose a threat to US national security and that the US has no legitimate reason to include Cuba on its so-called "State Sponsors of Terrorism" list.
The statement noted that this meeting once again demonstrates that Cuba does not harbor, support, finance, or allow the existence of terrorist or extremist organizations; there are no foreign military or intelligence bases on Cuban territory; Cuba has never supported hostile activities against the US, nor does it allow the use of its territory for actions against other countries.
The statement said both sides expressed a willingness to strengthen law enforcement cooperation.
Probability of Fed Holding Rates Steady in June at 96.8% According to the latest data from CME's "FedWatch Tool," the probability of the Federal Reserve holding interest rates steady in June is 96.8%, with a 3.2% probability of a cumulative 25 basis point rate cut. The probability of the Fed holding rates steady in July is 93.8%, with a 3.1% probability of a cumulative 25 basis point rate cut and a 3.1% probability of a cumulative 25 basis point rate hike.
Copper Prices Strengthen Again, Supply Security Becomes Core Driver Copper prices have strengthened again recently both domestically and internationally. Although the rally slowed somewhat this Thursday, the underlying reasons for this round of copper price increases remain noteworthy.
On the surface, recent drivers for copper prices include the energy crisis in Peru and repeated news about the Grasberg mine restart. However, multiple industry insiders believe the core logic currently being traded by the market has shifted from traditional supply-demand imbalances to a global reassessment of copper resource security.
Concerns Over Copper Mine Supply Intensify An analyst from CITIC Futures Research and Development Department stated that the essence of the current copper price rally is the ongoing fermentation of a global copper supply chain security crisis. She noted that entering May, copper prices broke out of a prolonged sideways trend and surged rapidly, with supply chain security being the core driver. Specifically, this round of supply chain security crisis primarily stems from a significant restriction in scrap copper supply, delays in overseas mine restarts, and the risk of contraction in overseas hydrometallurgical copper smelting capacity.
The Peruvian government issued an emergency decree on Monday due to an energy crisis, placing the industrial sector at the lowest priority for energy supply. The chief analyst at Guoxin Futures told reporters that local mining, beneficiation, and smelting operations will face dual constraints on energy and electricity. Copper is the base metal most affected by Peru's energy crisis, with the region accounting for over 10% of global copper supply. Although the Peruvian energy crisis has not yet had a substantial impact on the global refined copper balance, market concerns about the stability of local mine supply have significantly increased. This has become the "trigger" stimulating strategic metals like copper to break through macroeconomic turbulence and restart a new round of rally.
Besides Peru, Chilean copper mine production is also under pressure. Data released by the Chilean Copper Commission on Tuesday showed that Codelco's copper production in March fell 9.98% year-on-year to 110,900 tonnes. Production at the world's largest copper mine, BHP's Escondida, fell 15.75% year-on-year in March to 101,600 tonnes. Production at the large Collahuasi copper mine, jointly operated by Glencore and Anglo American, fell 10.8% year-on-year in March to 31,400 tonnes.
In Africa, Zambia, the second-largest copper producer on the continent, saw its copper exports fall by nearly 15% in the first quarter. Zambia's Minister of Mines stated on Wednesday that Zambia's copper production for the first quarter of the year was 208,992 tonnes, down 4.27% from 218,308 tonnes in the same period last year.
The CITIC Futures analyst stated that the stability of copper mine capacity is facing challenges, with the tight supply situation at the mine end continuously intensifying, pushing the spot treatment and refining charges down to extremely low levels around -$100 per tonne.
Multiple Links in the Industrial Chain Face Challenges Beyond the mine end, the Middle East situation is also transmitting pressure to the smelting end. The analyst noted that the US-Israel-Iran conflict has led to ongoing disruptions in shipping through the Strait of Hormuz, restricting over 50% of sulfuric acid import supply to Africa, pushing sulfuric acid delivered prices above $1,000 per tonne. Against the backdrop of rising prices for diesel, sulfuric acid, and auxiliary materials, the cost of hydrometallurgical copper smelting in Africa has increased significantly. Currently, the process cost alone for hydrometallurgical copper in the Democratic Republic of Congo has reached around $7,000 per tonne, up about 47% from the end of last year. Overseas hydrometallurgical copper capacity faces significant contraction risks.
The analyst stated that domestic scrap copper supply issues are also a major driver of this round of copper price increases. Since the beginning of this year, China's comprehensive implementation of "reverse invoicing" has led to a persistent shortage of scrap copper with invoices. Coupled with previous copper price declines causing holders to hold back supply, scrap copper supply has tightened further. Simultaneously, production of recycled copper rod has declined noticeably, with some scrap copper flowing more to smelters for conversion into anode copper to produce cathode copper, leading to a passive increase in refined copper consumption. In late March, the price difference between refined and scrap copper once fell near negative territory. That week, domestic copper social inventories drew down by 63,000 tonnes, also verifying the supporting effect of reduced scrap substitution on refined copper consumption.
Overall, the analyst believes that intensified copper mine supply tightness, the contraction trend in overseas smelting, and hindered release of recycled supply mean that almost every link in the copper supply chain—from raw materials and smelting to recycling—is being tested. Combined with resilient copper demand, the structural support for the commodity is further strengthening. "Of course, the current macro logic focuses on geopolitics. With the Middle East situation persisting, this means the liquidity environment remains constrained. Cautious macro sentiment means copper prices temporarily lack a stronger driver, curbing part of the price rally. If macro risks weaken or even clear, it could open up further upside for copper prices," she said.
Inter-Market Price Differences Also Attract Attention An analyst from SMM stated that while there are many hot topics in the copper market recently, they all point to the continued elevation of global attention to copper resource security. The market is repricing the entire copper industry chain. He noted that since 2025, the US has continuously strengthened copper's strategic attributes. In the US "Section 232" investigation targeting copper imports, copper concentrate, refined copper, scrap copper, and related derivatives were all included in the national security review scope. The US also proposed requirements for some high-quality scrap copper to be prioritized for domestic sale.
In this context, the premium of COMEX copper relative to LME copper is no longer just a simple futures price spread, but a price signal from the US market attracting globally deliverable copper resources. "If the LME-COMEX copper price spread continues to widen and is sufficient to cover transportation, financing, warehousing, and policy risks, then globally tradable material could potentially shift to the US," the SMM analyst stated. The current market has already begun trading this expectation, with the COMEX copper premium reflecting the US's attractiveness for resources.
However, he also noted that whether this logic truly evolves into a physical flow change still requires observing indicators such as US LME copper warehouse stocks, COMEX copper warehouse stocks, and the ratio of canceled warrants. If later data shows a decrease in US LME copper stocks, an increase in the canceled warrant ratio, and an increase in COMEX copper stocks, it would indicate material might be shifting from the LME system to the COMEX system. In that case, the LME nearby backwardation structure could have further room to strengthen.
"Once the LME structure shifts from contango to backwardation, its impact will further transmit to the LME-SHFE structure, potentially even compressing China's import price ratio and forcing the domestic export window to open passively. In such a scenario, domestic smelters would simultaneously face multiple pressures: rising raw material costs, losses on processing fees, and declining by-product revenues," the SMM analyst said.
The SMM analyst stated that pressure at the mine end is already very evident. Data shows copper concentrate TC has fallen to the range of -$107 to -$103 per tonne, hitting a record low. This indicates that the bargaining power of the mine end remains strong, and smelters' raw material procurement pressure continues to rise. Meanwhile, while sulfuric acid prices still provide some support for domestic pyrometallurgical smelting profits, with China restricting or banning some sulfuric acid exports after May, the room for further sulfuric acid price increases may be limited. If sulfuric acid prices subsequently fall while TC remains deeply negative, smelter profit structures would further deteriorate.
Looking ahead, the SMM analyst believes four key sets of indicators need close attention: first, the LME-COMEX price spread, US LME copper stocks, COMEX copper stocks, and the canceled warrant ratio; second, the LME inter-month structure, especially the TOM-NEXT spread; third, changes in China's refined-scrap price spread and scrap copper inventories; fourth, TC, sulfuric acid prices, and the LME-SHFE price ratio. "The current copper market has formed an interconnected pricing system between COMEX, LME, and SHFE. Capital and physical flows are being reshaped," he said. Against the backdrop of global resource competition, ensuring supply chain and cost security will remain the core challenge facing the copper industry chain in the future.
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