According to the Changjiang Nonferrous Metals Network, the disappointing U.S. non-farm payrolls data pressured the dollar, though expectations for interest rate hikes remain. Overnight, LME copper closed lower. However, with Nordic mining operations planning to fully restore cathode copper capacity by 2027, the narrowing spread between refined and scrap copper is favorable for refined copper consumption, suggesting spot copper prices may rise today.
Copper Futures Market
The weaker-than-expected U.S. jobs data weighed on the dollar, but the outlook for monetary tightening persists. Overnight, LME copper prices trended lower. The latest closing price was $13,286 per tonne, down $45 or 0.34%. Trading volume was 14,847 contracts, a decrease of 7,668 contracts, while open interest rose by 8,743 contracts to 250,327 contracts. On the Shanghai Futures Exchange, SHFE copper opened higher overnight and traded within a narrow range. The most active August 2026 contract settled at 102,410 yuan per tonne, up 120 yuan or 0.12%.
Data from the London Metal Exchange (LME) shows that copper inventories as of July 2 stood at 322,350 tonnes, down 2,500 tonnes or 0.77% from the previous session.
In early trading today, the most active SHFE August 2026 copper contract opened at 1,023,610 yuan per tonne at 09:01 Beijing time, an increase of 320 yuan.
Macroeconomic Factors
U.S. non-farm payrolls increased by only 57,000 in June, significantly below the expected 110,000, with the prior two months' figures revised down by a combined 74,000. The unemployment rate edged down, but labor force participation weakened, confirming a slowdown in employment growth momentum. Following the data release, markets scaled back bets on Federal Reserve rate hikes, with the implied probability of a December hike receding and expectations for an October hike being pushed back. The U.S. dollar index faced downward pressure but remained above the 100 level. For dollar-denominated metals, while the dollar's strength is not fully negated, the reduced near-term tightening expectations provide a marginal window for copper price recovery.
Domestic Developments
Domestically, the National Development and Reform Commission held a meeting to promote the development of the private sector, outlining that the output value of six emerging pillar industries during the "15th Five-Year Plan" period is expected to expand to over 10 trillion yuan. Data from the China Index Academy shows that the year-on-year decline in sales for the top 100 property developers narrowed for the fourth consecutive month in the first half (contracting by 1.3 percentage points from January to May), with a month-on-month increase of 11.8% in June on a full-caliber basis, providing some support to market sentiment.
Industry Fundamentals
On the supply side, Nordic mining and smelting company Boliden expects to fully restore copper cathode capacity at its Rönnskär smelter to over 350,000 tonnes per year by 2027, following the commissioning of a new electrolysis workshop. Since a 2023 fire, the facility has only produced anodes, with the Harjavalta plant maintaining high output of 160,000-170,000 tonnes to compensate. More critically, Chile's Antofagasta and major Chinese smelters have agreed to change the mid-year copper concentrate long-term contract to a "spot index-linked + floor price" model, breaking with the decades-old fixed TC/RC tradition. Spot treatment charges (TC) have plunged to a historical extreme of -$126.8 per dry tonne, meaning smelters are effectively paying to process ore and relying on sulfuric acid by-products for revenue. This shift confirms miners' regained pricing power. Supply constraints persist, with slow restarts at Indonesia's Grasberg, flood-related production cuts at Kamoa-Kakula in the Democratic Republic of Congo, and Chilean copper output down 12.94% year-on-year in May.
On the demand side, a structural offset is emerging. July is a traditional off-season, with high temperatures and rainfall, coupled with weak property markets, dragging on construction-related copper demand and appliance production scheduling. However, core demand growth is coming from AI data centers (approximately 40 tonnes of copper per megawatt), new energy vehicles (using 3-4 times more copper per vehicle than internal combustion engine vehicles), and power grid upgrades. Analysts project global copper demand could reach 42 million tonnes by 2040. Concurrently, the narrowing spread between refined and scrap copper to around 2,500 yuan per tonne is limiting substitution by scrap, lending unexpected resilience to refined copper consumption. This is evidenced by continued inventory drawdowns during the off-season and downstream buyers restocking on price dips.
Overall Outlook
In summary, soft U.S. jobs data has tempered rate hike expectations. Supply tightness, confirmed by negative TCs and the indexation of long-term contracts, combined with new demand from AI and grid infrastructure, provides a floor for prices. Spot copper prices are likely to rise today.
The expected trading range for today is between 102,000 and 103,000 yuan per tonne.
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