Copper futures market dynamics on May 14: Shanghai copper futures consolidated at high levels today, with the price center slightly shifting downwards. The main contract, 2606, opened at 108,110 yuan per tonne, reached a high of 108,820 yuan, a low of 106,540 yuan, and settled yesterday at 108,110 yuan. Today's closing price was 106,750 yuan per tonne, down 1,360 yuan or 1.26%. The total volume for the Shanghai copper 2606 contract throughout the day was 147,295 lots, a decrease of 30,223 lots, while open interest stood at 187,717 lots, down 16,153 lots. During the Asian session, LME copper fell from its highs. The latest quote as of 15:05 Beijing time was 13,940.5 US dollars per tonne, down 142.5 dollars or 1.01%.
Copper price statistics: Domestic spot copper prices fell sharply today. The Yangtze River spot 1# copper price was quoted at 107,740 yuan per tonne, down 1,060 yuan, with a premium of 160-200 yuan, down 20 yuan. The Yangtze River composite 1# copper price was quoted at 107,715 yuan per tonne, down 10,650 yuan, with a premium of 100-210 yuan, down 10 yuan. Guangdong spot 1# copper price was quoted at 107,790 yuan per tonne, down 1,030 yuan, with a premium of 130-330 yuan, up 10 yuan. The Shanghai region's 1# copper price was quoted at 107,620 yuan per tonne, down 1,060 yuan, with a premium of 20-100 yuan, down 20 yuan.
Market analysis: Following a continuous surge after the May Day holiday, which pushed copper prices to a three-and-a-half-month high, a technical correction has emerged due to suppressed terminal buying. Previously, heightened risks of global mine supply disruptions combined with market bets on AI demand jointly drove this round of strong upward momentum in copper prices.
At the macro level, bullish and bearish factors are fiercely contested, leading to volatile market sentiment. On one hand, recent resilient US economic data has strengthened expectations for the Federal Reserve to maintain high interest rates or even hike within the year. The rebound in the US dollar index and rising risk-averse sentiment have prompted some capital to withdraw from the copper market. On the other hand, high-level meetings between China and the US have released positive signals. Furthermore, China's April CPI and PPI data both exceeded expectations, providing solid confidence support for industrial metal demand. Additionally, the upcoming key industrial chain energy conservation inspection by the Ministry of Industry and Information Technology will further regulate the industry's long-term development.
On the supply side, the global copper concentrate shortage continues to intensify. Affected by blocked shipping in the Strait of Hormuz and stalled US-Iran negotiations, sulfur and sulfuric acid supplies are tightening, directly threatening the normal operation of copper smelting. Simultaneously, the full production timeline for Indonesia's Grasberg copper mine has been delayed until the end of 2027. Peru has enacted an energy state of emergency decree. Coupled with a 4.27% year-on-year decline in Zambia's Q1 copper output and a continuous drop of over 90% in domestic spot treatment charges, multiple factors are collectively exacerbating the tight global copper concentrate supply situation.
On the demand side, performance diverges between traditional and emerging sectors. In traditional consumption, power grid investment remains the core driver. The State Grid's projected 4 trillion yuan in fixed asset investment during the "15th Five-Year Plan" period provides a solid foundation for copper demand. In emerging sectors, AI computing power and data center construction are becoming significant engines for demand growth. Morgan Stanley predicts a notable climb in global data center copper consumption from 2026 to 2027. The new energy vehicle sector also maintains steady growth.
Furthermore, the COMEX copper price maintains a premium of approximately 600 US dollars per tonne over LME copper, providing additional upward support for copper prices.
In the domestic spot market, high prices have suppressed terminal purchasing willingness, with trading dominated by essential long-term contracts. As the delivery and contract rollover period approaches, market liquidity has somewhat contracted. Holders are actively selling to reduce inventory, but downstream buyers exhibit strong aversion to high prices. Spot trading has nearly stalled, and the spot premium/discount maintains a weak, fluctuating pattern.
In summary, despite facing short-term pressure for a correction from highs, risks of supply chain disruptions at the mine level and incremental demand from AI are reshaping copper's supply-demand logic. The overarching theme of a short squeeze remains unchanged. It is expected that copper prices will maintain a strong, high-level consolidation in the short term. The reference trading range for tomorrow is projected to be 104,500 - 109,500 yuan per tonne. Operationally, it is advised to adopt a strategy of selling high and buying low, with cautious participation.
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