The outlook for further interest rate increases continues to strengthen, exerting downward pressure on copper prices.
Market Highlights and Key Data
Futures Performance
On June 24, 2026, the most active SHFE copper contract opened at 103,100 yuan per tonne and closed at 103,550 yuan per tonne, representing a slight decline of 0.03% from the previous trading day's close. The overnight session saw the contract open at 73,810 yuan and settle at 74,060 yuan, a gain of 0.47% from the previous afternoon's close.
Spot Market Conditions
According to SMM data, the SHFE copper July 2026 contract exhibited an M-shaped pattern during the morning session. It opened at 103,000 yuan per tonne, dipped to 102,900 yuan, then surged to 103,360 yuan before consolidating within a range and closing at 103,180 yuan. The contango between nearby contracts was 10-50 yuan per tonne. Import arbitrage losses for the current month narrowed to 30-80 yuan per tonne. Spot trading sentiment in Shanghai showed a slight improvement compared to the previous day. In the morning, holders repeatedly lowered their offers, with discounts for standard, wet, and non-standard grades widening. Only premium-quality copper maintained a small premium. Expectations of ample supply from Changzhou tomorrow are likely to weaken support for premiums and discounts. The trend of merchants offloading inventory at reduced prices to meet month-end cash flow needs is expected to continue. Lower copper prices have spurred a modest recovery in downstream orders, with end-users increasing purchases on dips but remaining focused on price pressure and cautious about chasing rallies. As import losses approach a breakeven point, attention is needed on potential inflows from overseas markets. Short-term selling pressure in the spot market persists, and discounts for SHFE copper are likely to widen slightly today.
Key Information Summary
A social media post from former U.S. President Donald Trump stated that Iran had informed the U.S. that vessels currently transiting the Strait of Hormuz are subject to "no tolls, insurance fees, or any other form of charge." Trump also threatened to immediately terminate related negotiations if this information proved inaccurate. Regarding the temporary cancellation of plans to sign a bill aimed at reducing housing costs and increasing supply, Trump indicated he would not sign the legislation, asserting his expertise in real estate and emphasizing that interest rate cuts are the key.
The International Maritime Organization (IMO) released detailed operational guidelines for the Strait of Hormuz evacuation plan, stating that over 11,000 crew members stranded on vessels in the Gulf region will be evacuated in phases under a unified coordination mechanism. According to the arrangement, Iran is responsible for traffic management and navigation coordination for the northern route, while Oman and the U.S. handle coordination for the southern route. Vessels can choose their route based on their own risk assessments.
Mining Sector Developments
In mining news, ASX-listed miner American West Metals is advancing the development of the Storm copper-silver project in Nunavut, Canada. Through in-depth optimization of the beneficiation process, mining plan, and supporting engineering details, the project's Pre-Feasibility Study (PFS) is in its final stages and is expected to be finalized in the third quarter of 2026. This refinement aims to further reduce project development risks, perfect the technical implementation pathway, and fully ensure the long-term, stable investment return potential of this emerging Canadian copper-silver mine. The report, jointly prepared by Sacre Davey, Ausenco, and Inuit contractor Nuna Group, will optimize the processing plant flow and mining plan, focusing on unlocking the value of high-grade copper and silver.
Additionally, Anglo American plc, through its 50.1%-owned subsidiary Anglo American Sur, has signed a final agreement with Chile's state-owned Codelco to implement a joint mining plan for the Los Bronces and Andina copper mines. This plan formalizes the coordinated development of the two adjacent core mining areas. The parties will integrate Anglo American's Los Bronces mine with Codelco's Andina mine through a unified mining development plan, shared infrastructure, and mining systems, aiming to unlock the value of contiguous, high-quality copper resources and create a globally significant benchmark for collaborative copper mining. The plan is expected to release an additional 2.7 million tonnes of copper over 21 years, averaging 120,000 tonnes of low-cost copper production annually. Output will be shared equally, requiring only modest capital investment, and is projected to create at least $5 billion in shared value. The agreement is still subject to obtaining relevant environmental permits and is expected to be completed before 2030.
Smelting and Imports
Regarding smelting and imports, Polish miner KGHM Polska Miedź S.A. disclosed its May production and sales data, showing that sales volumes for both copper and silver exceeded production, indicating inventory drawdowns to meet supply. Sellable copper production was 58.5 thousand tonnes, while sales reached 62.1 thousand tonnes, drawing down inventory by 3.6 thousand tonnes. Silver production was 129.4 tonnes against sales of 164 tonnes, a deficit of 34.6 tonnes, highlighting the rigidity of physical metal demand. The current copper market faces dual pressures from tightening mine supply and low smelting treatment charges. Limited global copper concentrate increments mean even minor mine production cuts can trigger market volatility. Coupled with tariff policy disruptions, traders are shifting spot material to North America, tightening circulating inventories in Europe and Asia. Short-term copper prices are primarily driven by demand recovery signals and production guidance from overseas miners. If more miners reduce output or hold back sales, the market's tight balance could shift further towards a deficit.
Consumption Trends
Domestic copper end-consumption shows structural divergence. The traditional off-season is dragging down overall demand, with only the new energy and AI computing infrastructure sectors providing support. Demand from home appliances, general consumer electronics, and hardware continues to weaken. High copper prices are suppressing downstream purchasing willingness. The market is primarily characterized by fixed-price purchases for immediate needs. Purchasing sees a slight uptick when prices dip, but end-users quickly return to a wait-and-see stance when prices rebound, with no large-scale inventory replenishment. In the power cable sector, only orders for offshore wind and data center cables remain stable, while orders for construction-related copper products are persistently low. Demand from new energy vehicles and industrial motors remains robust, offsetting the drag from the seasonal slowdown in home appliances. Pre-holiday stocking demand ahead of the Dragon Boat Festival fell short of expectations. Mid- and downstream processing plants are actively controlling their raw material procurement pace. Raw material inventories continue to decline, while finished product inventories are passively accumulating, leading to reduced production schedules. Looking ahead to next week, post-holiday terminal demand is expected to see only a marginal, slight recovery. Pressure from the traditional off-season will persist, and high copper prices will continue to dampen companies' willingness to stockpile. Transactions will still rely on rigid demand purchases triggered by price declines. Orders from the AI and new energy sectors show resilience, serving as the sole demand support. A trend-based recovery in overall terminal consumption is unlikely until the seasonal shift window arrives in late July, when market trading activity is expected to see sustained improvement.
Inventory and Warrant Data
LME warrants decreased by 3,000 tonnes from the previous day to 341,925 tonnes. SHFE warrants decreased by 137 tonnes from the previous day to 74,943 tonnes. As of June 22, domestic market physical cathode copper inventories stood at 208,100 tonnes, an increase of 13,800 tonnes from the previous week.
Trading Strategy
Copper: Neutral
Overall, market expectations for Federal Reserve rate hikes continue to intensify, with some commentary even suggesting the need for three hikes within the year. The next policy meeting is still some time away, making it difficult to disprove such expectations in the interim. Precious metal prices have already suffered significant setbacks. In this context, copper prices may also struggle to remain immune. For now, a wait-and-see approach is advised, focusing on support levels around the 100,000 yuan per tonne mark.
Arbitrage: Pause
Options: Pause
Risk Factors
An overly rapid decline in domestic demand leading to a substantial inventory build-up.
Liquidity crunch risks in overseas markets.
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