Copper futures market activity for June 18th: The main Shanghai copper futures contract for July 2026 entered a phase of high-level correction and consolidation today. The opening price was reported at 105,280 yuan per ton, with a high of 105,580 yuan, a low of 104,430 yuan, and a previous settlement of 105,290 yuan. Today's closing price settled at 104,780 yuan, down 510 yuan, representing a decline of 0.48%. The total trading volume for the July 2026 contract throughout the day was 72,083 lots, an increase of 3,487 lots, while open interest decreased by 11,434 lots to 112,863 lots. During the Asian trading session, London copper prices showed weak and volatile movement. As of 15:11 Beijing time, the latest quote was $13,699 per ton, down $136, a drop of 0.98%.
Spot copper price statistics: Domestic spot copper prices fell today. The Yangtze River spot 1# copper price was quoted at 105,270 yuan per ton, down 380 yuan, with a premium of 100-140 yuan, unchanged from the previous session. The Yangtze River comprehensive 1# copper price was quoted at 105,255 yuan per ton, down 380 yuan, with a premium of 50-160 yuan, also unchanged. The Guangdong spot 1# copper price was quoted at 105,310 yuan per ton, down 400 yuan, with a premium of 60-260 yuan, down 20 yuan. The Shanghai region 1# copper price was quoted at 105,180 yuan per ton, down 370 yuan, with a discount of 10 yuan to a premium of 70 yuan, up 10 yuan.
Market Analysis: Macro Headwinds Meet Industrial Resilience
At the macro level, a dual interplay of geopolitical tensions and monetary policy has been the primary driver of recent market sentiment. On June 18th, Pakistani Prime Minister Shehbaz Sharif confirmed that the long-distance Memorandum of Understanding (MoU) signed between the US and Iran has taken immediate effect. As a first step, Iran will reopen the Strait of Hormuz, with the US simultaneously lifting its maritime blockade, and both parties have committed to advancing final agreement negotiations within 60 days. While this news brought brief relief to tensions in the Middle East, the market remains cautious about subsequent implementation. Oil prices, despite some retreat, continue to trade at elevated and volatile levels. Concurrently, the debut of the new Federal Reserve Chair, Kevin Warsh, sent shockwaves through global financial markets. Although the FOMC meeting maintained the federal funds rate target range at 3.50%-3.75%, the significantly streamlined policy statement eliminated forward guidance. The dot plot released a strongly hawkish signal, with nine officials projecting at least one rate hike within the year, and the 2026 PCE inflation forecast was revised upward to 3.6%. Consequently, the US Dollar Index surged strongly, breaking above the 100 level. US stocks experienced widespread declines, and a flight-to-safety sentiment intensified, applying significant valuation pressure on dollar-denominated commodities like copper.
Domestically, China's May economic data exhibited characteristics of shifting towards new and higher-quality growth. The total retail sales of consumer goods and services from January to May increased by 2.8% year-on-year. Revenue from high-tech manufacturing sectors, including integrated circuits, robotics, and intelligent vehicle equipment, saw substantial growth. This indicates positive momentum in economic structural transformation, providing new growth drivers for copper demand.
Regarding the industrial fundamentals, the tight supply situation for raw materials has not eased and has even intensified further. Major Chinese copper producers are seeking to expand the membership of the China Smelters Purchase Team (CSPT) to strengthen their bargaining power in negotiations with miners like Chile's Antofagasta. The spot copper concentrate treatment and refining charges (TC/RCs) are currently mired in negative territory, leaving smelters facing a "produce at a loss" dilemma. The CSPT has refused to issue quarterly guidance for six consecutive quarters to avoid establishing a negative benchmark. Copper output in Kazakhstan for January-May saw a marginal decline of 0.4%. Data from the World Bureau of Metal Statistics (WBMS) showed a global refined copper surplus of only 10,700 tonnes in April, which was more a result of seasonal smelting activity and does not alter the fundamental long-term deficit in mine supply. Furthermore, new LME rules restricting the registration of Russian-origin copper and cobalt warrants, while having limited compliance impact, add another layer of supply chain uncertainty. On the smelting side, hit by the dual pressures of high raw material costs and declining sulfuric acid prices eroding profits, coupled with the peak period for annual maintenance in June, leading domestic smelters are proactively controlling output. The CSPT's joint production cut measures are being strictly enforced, and domestic refined copper output is expected to decline further month-on-month. Inventories outside the US continue to shrink, maintaining strong expectations for tight supply. On the demand side, a clear characteristic of "resilience despite a traditional off-season" is evident. Although traditional property market recovery remains weak, air conditioning production schedules are marginally declining, and prices above 105,000 yuan per ton have dampened downstream willingness to chase rallies—leading to subdued pre-holiday spot market activity and pressured premiums—the AI computing boom is driving the copper-clad laminate (PCB) industry into a high-growth cycle. Copper usage in new energy vehicles is steadily increasing, with these emerging sectors effectively offsetting weakness in traditional demand. Persistent low levels and continued drawdowns in domestic social inventories provide a solid floor for copper prices.
In the spot market, trading today was predominantly characterized by on-demand purchasing. As the last trading day before the Dragon Boat Festival holiday, market activity became increasingly subdued. The supply of imported material remained limited, and spot premiums held steady. Downstream companies showed significantly reduced enthusiasm for restocking, traders were cautious in their purchases, and the overall market adopted a wait-and-see stance, resulting in average actual trading volume. This pre-holiday consolidation with reduced volume is more attributable to risk-off sentiment and holiday effects rather than a substantive collapse in demand.
Overall Assessment
In summary, the signing of the US-Iran MoU has opened a 60-day negotiation window; while geopolitical premiums have receded somewhat, uncertainties remain. The hawkish shock from Chair Warsh's debut has led to a stronger US dollar, placing clear short-term pressure on the non-ferrous metals sector. However, from an industrial logic perspective, copper prices have not lost their underlying support. The shortage at the mine end is forcing smelter production cuts, making supply-side contraction highly certain. Although demand faces seasonal headwinds, structural growth from new economic sectors provides strong resilience, and the trend of declining social inventories validates the fundamentally sound performance.
Outlook and Trading Strategy
Looking ahead, the main Shanghai copper contract is expected to maintain a high-level, range-bound oscillation between 104,000 and 106,000 yuan per ton after the holiday. The fierce contest between macro bearish factors and industrial bullish factors is set to continue, making a one-sided, sustained surge or crash in copper prices unlikely.
Regarding trading strategy, a wait-and-see approach is advised, allowing time for macro sentiment to be digested and post-holiday resumption of operations to become clearer. Aggressive investors may watch for pullback opportunities. If prices retreat below the 104,300-104,500 yuan per ton range, attempting a light long position for a potential rebound supported by fundamentals could be considered. However, it is crucial to set strict stop-losses and carefully manage the trading pace and associated risks.
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