1. The most-traded BC copper contract closed down 0.76% amid macro risk aversion and loose supply and demand

Today, the most-traded BC copper contract opened at 70,560 yuan/mt with a short position of 508 lots, closing the day with a bearish candle. During the night session, the most-traded BC copper contract fluctuated considerably, touching a high of 70,650 yuan/mt early on. It then fluctuated downward and, after the day session opened, maintained a wide range of fluctuation again. Near the end of the session, it dropped to the intraday low of 70,200 yuan/mt, ultimately closing at 70,360 yuan/mt, marking a 0.76% decline. Open interest reached 3,345 lots, a decrease of 534 lots from the previous trading day, with trading volume reaching 4,696 lots. On the macro side, the EU's 93 billion-euro retaliatory tariff list against the US may be implemented on August 7, and there are also uncertainties in the progress of trade negotiations between India and the US, as well as between India and the UK, exacerbating market risk-aversion sentiment. The escalation of the Thai-Cambodian conflict led to Thailand's airstrikes on Cambodia, pushing up the overnight US dollar index. The political turmoil surrounding the US Fed's interest rate cut continues to disrupt the market. On the fundamental side, LME inventory increased by 3,700 mt to 128,475 mt. On the demand side, the off-season effect continues to intensify, coupled with sideways movement of copper prices in a high price range, suppressing downstream procurement enthusiasm. The current overall fundamental pattern is characterized by "loosening supply and weakening demand."

The SHFE copper 2508 contract closed at 79,250 yuan/mt. If based on the most-traded BC copper 2508 contract price of 70,360 yuan/mt, its after-tax price would be 79,506 yuan/mt. The price spread between the SHFE copper 2508 contract and the BC copper contract is -256, maintaining an inversion and decreasing from the previous day.

2.Uncertainties increased ahead of China-US tariff negotiations; copper prices jumped initially and then pulled back during the week

On the macro front, Trump frequently adjusted his stance on trade policies, proposing a tiered tariff plan ranging from 15% to 50% for multiple countries. Despite expressing a willingness to remove clauses for some allies like Japan, the overall policy approach remained dominated by high-pressure negotiations. Meanwhile, the EU announced its intention to impose retaliatory tariffs on US products worth 93 billion euros before August 7, escalating market concerns about a global trade conflict. The potential for a new round of trade agreement negotiations between China and the US also became a focal point of market attention. Regarding the US Fed, despite White House economic advisors repeatedly denying rumors of Powell's dismissal, Trump's repeated high-profile pressure and demands for a 300-basis-point interest rate cut heightened market concerns about the Fed's independence. Policy negotiations and public opinion interference continued to sway market sentiment. Domestically, the "anti-rat race" directive spurred a general rally in the non-ferrous metals sector. This week, LME copper jumped initially and then pulled back, rising to around $9,900/mt mid-week before pulling back to $9,800/mt. Market sentiment remained cautious about macro uncertainties. SHFE copper also faced resistance at the 80,000 yuan/mt level, with an overall slower pace of movement.

On the fundamental front, spot TC for copper concentrates rebounded again this week, while buyer activity declined. Market traders mostly awaited the final outcomes of next week's tariff negotiations between the US and Chile, as well as between China and the US, keeping the market sluggish overall. Domestically, social inventory unexpectedly decreased significantly this week, but consumption lacked strong support based on copper prices and downstream operating rates. According to SMM, this may be due to reduced imports. Overall, both upstream and downstream sectors were sluggish this week, with a strong wait-and-see sentiment prevailing in the market.

Looking ahead to next week, market focus will continue to center on further clarity in tariff negotiations and the Fed's policy stance in early August. Following the implementation of tariff details, a window for tariff-based interest rate spread trading is expected to open widely, potentially reshaping global trade flows in H2. Copper prices are unlikely to receive directional guidance in the short term. It is expected that LME copper will fluctuate between $9,600 and $9,900/mt, while SHFE copper will fluctuate between 77,000 and 79,500 yuan/mt. On the spot front, with inventory remaining at low levels and trade flows disrupted, price spreads between brands remain large. However, weak consumption will drive the overall center downward. It is expected that spot prices against the SHFE copper 2508 contract will range from a discount of 20 yuan/mt to a premium of 180 yuan/mt.

3.This week, both the operating rate of copper wire and cable production declined. With high copper prices and the off-season, a further decline is expected next week

This week (July 18-24), the operating rate of SMM copper wire and cable enterprises was 70.83%, down 2.07 percentage points MoM and 15.28 percentage points YoY, falling short of expectations by 1.14 percentage points. The significant expansion of the YoY decline to 15 percentage points stems from the contrast between the rebound in orders driven by the decline in copper prices YoY last year and the notably weaker overall demand this year compared to last year. Specifically, the core reason for the decline in the operating rate this week was that the rise in copper prices suppressed downstream purchase sentiment. Coupled with the industry entering the off-season and a reduction in orders, most enterprises could only rely on long-term contracts in hand from earlier periods to maintain basic operations. Inventory levels also adjusted synchronously: affected by the high copper prices and slower reimbursements after the peak season for wire and cable enterprises in Q2, enterprises faced financial constraints, leading to a sluggish willingness to purchase raw materials. As a result, the raw material inventory of sampled enterprises decreased by 5.63% MoM this week, reaching 15,090 mt. Meanwhile, finished product inventories decreased by 2.35% MoM this week with the decline in operations, reaching 19,540 mt. From an industry perspective, the off-season combined with copper prices fluctuating at highs led to orders in various industries falling short of expectations. Overall, it is difficult to improve the sluggish consumption during the demand off-season, and the suppressive effect of high copper prices on consumption is evident. Therefore, SMM expects the operating rate of copper wire and cable enterprises to decline by 0.53 percentage points MoM to 70.30% next week (July 25-31), with the YoY decline further expanding to 21.2 percentage points.

4.Copper cathode rod exports in June decreased by 1.5% MoM, and are expected to recover in July, maintaining YoY growth

Copper cathode rod exports fell by 1.5% MoM in June and are expected to recover somewhat in July, maintaining YoY growth [ analysis]: Affected by weak end-use consumption, the total copper cathode rod exports in June declined slightly as expected last month, but the decline was minor, with the total volume remaining stable and YoY growth expanding. The specific data are as follows:

According to customs data, in terms of the total export volume of copper wire rod, the total export volume of copper wire rod in June decreased by 1.5% MoM and increased by 42.9% YoY. Although the MoM decline was observed, the YoY growth rate expanded.

In June, exports of copper cathode rod (>6mm) continued to reach new highs, with the Southeast Asian market maintaining steady growth. In mid-June, the total exports of copper cathode rod with a maximum cross-sectional area >6mm were 9,827.53 mt, up 8.4% MoM and 50.36% YoY. Looking at specific trade modes for exports, in June 2025, the exports of copper cathode rod with a maximum cross-sectional area >6mm under Processing with Imported Materials were 7,183.14 mt, increasing by 36.22% MoM and 33.75 times YoY. The exports under Processing Trade with Supplied Materials were 2,644.26 mt, decreasing by 25.11% MoM, with zero exports in the same period last year. The exports under Ordinary Trade in June were 258.82 mt, decreasing by 99.9% MoM.

In June 2025, exports of refined copper wire (≤6mm) decreased, dragging down the overall volume. In June, the total export volume of refined copper wire (≤6mm) was 6,803.68 mt, down 13.1% MoM and up 33.4% YoY. In terms of specific export trade modes, the export volume of refined copper wire (≤6mm) under Processing with Imported Materials in June 2025 was 4,674.25 mt, down 5.2% MoM and up 32.75 times YoY. The export volume of refined copper wire (≤6mm) under Processing Trade with Supplied Materials was 603.39 mt, down 48.3% MoM and up 17.36% YoY. In June, the second-largest export volume of refined copper wire (≤6mm) was still Entrepot Trade by Customs Special Control Area, at 1,072.09 mt, down 20.77% MoM and up 39.15 times YoY. The export volume under Ordinary Trade was 451.01 mt, up 21.02% MoM and down 89.71% YoY.

In summary, the overall end-use demand was weak in June, with several copper cathode rod enterprises experiencing a certain decline in exports. However, the market demand in Southeast Asia remained stable overall, while the carry-over demand for domestic deep processing increased, resulting in only a slight decline in total exports in June. Entering July, with the fall in copper prices, the foreign trade market improved somewhat, while the domestic carry-over demand still persisted. predicts that the exports of copper wire rod will recover in July.

5. Copper plate/sheet and strip exports fell both YoY and MoM in June, with a 36.9% YoY decline in exports to Vietnam.

According to data from the General Administration of Customs, domestic copper plate/sheet and strip exports reached 10,340.7 mt in June 2025, down 6.27% MoM and 9.95% YoY. As of June, cumulative copper plate/sheet and strip exports from China totaled 60,538.83 mt, up 1.29% YoY.

Customs data shows that in June, China's copper plate/sheet and strip exports covered 97 countries and regions, with total exports pulling back both YoY and MoM. Breakdown of export destinations showed that South Korea ranked first with 1,322 mt, up 3.4% YoY, continuing its positive trend; exports to India were 889 mt, surging 8.6% YoY, indicating significant demand growth; exports to Vietnam were 899 mt, but fell 36.9% YoY, showing pressure in performance. In addition, copper plate/sheet and strip exports to Indonesia and Malaysia saw prominent increases. Exports to Indonesia were 417 mt, soaring 108.5% YoY; exports to Malaysia were 662 mt, up 41.1% YoY. As an important ASEAN country, Indonesia became one of the beneficiary markets for the shift in exports. In June, exports to the US rebounded, increasing by 24 mt compared to May and up 27.1% YoY; in addition, exports to Japan and Saudi Arabia cooled down, with copper plate/sheet and strip exports falling 46.6% and 62.7% YoY, respectively. Under the adjustment of the export pattern, the demand in some traditional markets contracted significantly.

The structure of China's copper plate/sheet and strip export trade modes exhibits distinct characteristics. Data from June shows that Processing with Imported Materials was the primary mode, with exports reaching 6,848 mt, accounting for 66.2% of the total; Processing and Assembling had exports of 1,674 mt, accounting for 16.2%; Ordinary Trade had exports of 1,322 mt, accounting for 12.8%; and other trade modes had exports of 497 mt, accounting for 4.8%. The collaborative efforts of diverse trade modes collectively shaped the export trade pattern in June.