Nanhua Futures(SH:603093) Nan Hua Qi Huo·2025-12-21 13:38Report Industry Investment Rating No information provided in the content. Core Viewpoints of the Report - The core contradiction this week lies in the impact of the US non-farm payroll data and unemployment rate on the probability of interest rate cuts, the supply-demand relationship in the copper market, and the confirmation of the tight supply of copper mines in 2026. Looking ahead to next week, macroeconomic data will affect market sentiment and copper prices. The strategy is to follow the trend if there is a breakthrough; otherwise, buy at low levels within the range [2][3]. - Cathode copper is currently in the mid - stage of an uptrend with a neutral cycle, while LME copper is in the late stage of an uptrend at a high cycle level, and there is a risk of a pullback. The risk - return ratios for going long on SHFE copper and LME copper are low, so caution is advised [3]. Summary by Relevant Catalogs 1. Core Contradiction and Strategy Suggestion 1.1 Core Contradiction - Macroeconomic Aspect: The US non - farm payroll data and unemployment rate exceeded market expectations, slightly increasing the probability of interest rate cuts. The probability of a 25 - basis - point interest rate cut by the Fed in January 2026 is 26.6% (24.4% the previous week), and the probability of keeping interest rates unchanged is 73.4%. By March 2026, the probability of a cumulative 25 - basis - point cut is 46.8%, the probability of keeping interest rates unchanged is 41.8%, and the probability of a cumulative 50 - basis - point cut is 11.5%. Next week, the release of macroeconomic data such as the US initial jobless claims and core PCE price index will affect market sentiment [2][3]. - Fundamental Aspect: Near the end of the year, holders of copper have a stronger willingness to destock. In the context of increasing electrolytic copper production from November to December, the sellers' willingness to sell continues to rise, while downstream processing enterprises are still hesitant to buy at high prices, resulting in limited spot price increases. The LME copper cancelled warrants remain above 60,000 tons, supporting the rebound of the copper premium in China's bonded area. The export window is still open. The 2026 copper long - term TC/RC, announced over the weekend, is set at $0/ton and 0 cents/pound, confirming the tight supply of copper mines in that year [2]. 1.2 Trading - Type Strategy Suggestion - Trend Judgment: Cathode copper is in the mid - stage of an uptrend with a neutral cycle; LME copper is in the late stage of an uptrend at a high cycle level, and attention should be paid to the risk of a pullback. The risk - return ratio for going long on SHFE copper is 0.69% (low risk - return ratio), and for LME copper is 0.71% (low risk - return ratio), so caution is advised [3][14]. - Price Range: The price range for SHFE copper is [89,735, 95,178], with a price center of 92,457; for LME copper, it is [11,303, 12,145], with a price center of 11,724 [14]. - Strategy Suggestion: Follow the trend if there is a breakthrough; otherwise, buy at low levels within the range [3]. - Basis, Calendar Spread, and Arbitrage Strategy: The basis strategy is to expect it to strengthen. On December 19, the basis was - 565 yuan/ton, in the lowest 10% of historical quantiles, and the probability of an expansion in the next 1 - 2 weeks is 82.3%. The calendar spread strategy is neutral, with the main fluctuation range of the spread between the first - and third - month contracts being [- 90, 260], and the current spread is - 40. The cross - border spread is within the normal range, and it is recommended to wait and see. The current SHFE - LME ratio is 7.89, at the 43.3% historical quantile (lower than last week) [14][16]. 1.3 Enterprise Hedging Strategy Suggestion - Inventory Management: For enterprises with high finished - product inventory worried about price drops, when the expected price has strong resistance at 95,000 yuan/ton and the lower limit is 90,000 yuan/ton, they can short the SHFE copper main contract at the resistance level, build positions at high prices, and stop losses if the price breaks through. They can also sell call options or buy put options but should wait and see for now. - Raw Material Management: For enterprises with low raw - material inventory worried about price increases, when the expected price has strong support at 90,000 yuan/ton, they can buy the main contract futures near the support level. They can also buy up - and - out cumulative options in the range of 90,000 - 94,000 yuan/ton [20]. 1.4 Review of Trading and Hedging Strategies - The previous long futures hedging positions bought at low levels can continue to be held. Those who have not hedged may have missed the ideal hedging price. If they are in a hurry to purchase, they can consider the "sell put option + buy call option" combination to synthesize a long strategy [25]. 2. This Week's Important Information and Next Week's Key Event Interpretation 2.1 This Week's Important Information - Positive Information: On December 20, Chinese smelters and Antofagasta set the 2026 copper concentrate long - term processing fee Benchmark at $0/ton and 0 cents/pound. From January to October 2025, the global refined copper market had a surplus of 122,000 tons, less than the 261,000 - ton surplus in the same period last year. Global copper demand growth forecasts have been revised upward, with the 2025 growth rate expected to increase from 2.4% to 2.7%. China's demand expectation has been raised from 3.3% to 3.7%, and demand outside China has been raised from 1.0% to 1.2%. Institutions expect the 2026 market to remain slightly in surplus, with the surplus potentially expanding in 2027, and the market to return to a structural shortage by 2030 [28][29][30]. - Negative Information: In November 2025, the domestic copper rod output was 106,210 tons, a 7.87% increase from October, and the comprehensive capacity utilization rate was 54.08%, a 3.95% increase from the previous month. The Chinese copper industry monthly prosperity index in November was 39.7, a 2 - point decrease from the previous month, and continued to operate in the "normal" range. The LME plans to implement new position limit regulations from July next year. The probability of a 25 - basis - point interest rate cut by the Fed in January 2026 and cumulative cuts by March 2026 has been adjusted [30][31][32]. 2.2 Next Week's Key Event Interpretation Next week, many macroeconomic indicators will be released, including the UK GDP year - on - year, US PCE price index, initial jobless claims, etc., which will affect market sentiment on copper prices [34]. 3. Interpretation of Price, Volume, and Capital on the Disk 3.1 Domestic Market Interpretation This week, the trading volume and open interest of the SHFE copper weighted index decreased significantly, and the market speculation degree dropped below the mid - line. The price of the SHFE copper main contract fluctuated around 92,579 yuan/ton, with a weekly increase of 0.57% and an amplitude of 3.95%, and closed at 93,180 yuan/ton on Friday [35][36]. 3.2 Overseas Market Interpretation This week, the overseas copper futures performed better than the domestic market. The Comex copper price reached a one - month high on Friday night and then pulled back, while the LME copper price maintained an uptrend with a small amplitude. The LME copper price mainly fluctuated in the range of [11,536.5, 11,928] dollars/ton, increased by 1.58% week - on - week, and closed at 11,870.5 dollars/ton. The Comex copper price mainly fluctuated in the range of [531.75, 556.55] cents/pound, increased by 1.41% week - on - week, and closed at 548.35 cents/pound. The LME copper term structure has gradually changed from contango to backwardation, and the positive spread between months has widened negatively. The open interest of the Comex copper active contract remains at a high level in the same period [35][38]. 4. Analysis of Spot Price and Profit 4.1 Spot Price and Smelting Profit In the second half of this week, the electrolytic copper spot price strengthened, but the discount widened. The scrap copper market showed "higher prices but less volume", and the invoice situation in Guangdong and Jiangxi was tight, increasing the capital cost pressure on scrap copper enterprises. The purchasing and selling sentiment in the electrolytic copper spot market changed. The smelting income of refined copper increased week - on - week [42][43]. 4.2 Import Profit and Import Volume This week, the copper import profit and scrap copper import profit increased significantly year - on - year, and domestic enterprises' willingness to import copper is expected to increase. The Yangshan copper premium in the bonded area has been rising, which will continue to support smelters' copper exports. It is expected that the copper inventory in the bonded area will remain balanced. It is estimated that China will import 2.6 million physical tons of copper ore and concentrates in December 2025, with an annual import volume of 30.26 million physical tons, a year - on - year increase of 7.43% [45][46]. 4.3 Inventory Analysis This week, the "siphon effect" of the Comex copper inventory still exists. The domestic copper inventory increased year - on - year, and the LME copper inventory decreased year - on - year. The LME copper cancelled warrants remained above 60,000 tons but decreased compared to the previous week, while the LME copper registered inventory increased significantly. The total Comex copper inventory increased, and the registered inventory continued to rise, indicating that holders continued to sell on the disk [49]. 5. Supply - Demand Deduction and Price Expectation 5.1 Supply Deduction - Global Perspective: In 2025, the global copper concentrate production is expected to be 19.871 million metal tons, with an actual copper rough - smelting output of 20.154 million metal tons, and the global copper concentrate supply - demand balance is - 166,000 metal tons. In 2026, the global copper concentrate production is expected to be 20.441 million metal tons, with an actual copper rough - smelting output of 20.664 million metal tons, and the global copper concentrate supply - demand balance is - 331,000 metal tons [55]. - Domestic Perspective: In November, China's electrolytic copper production was 1.1031 million tons, a 1.05% month - on - month increase and a 9.75% year - on - year increase. The cumulative production from January to November was 12.2545 million tons, a 11.76% year - on - year increase. In December, it is expected that 4 smelters will be under maintenance, with an expected impact of 0.5 million tons. It is estimated that the electrolytic copper production in December will be 1.1688 million tons, a 5.96% month - on - month increase and a 6.69% year - on - year increase [56][57]. 5.2 Demand Expectation In November, the domestic copper product output was 1.7879 million tons, slightly lower than expected, and the comprehensive copper product operating rate was 61.6%, a 3.8% month - on - month increase. Except for the recycled copper rod industry, the operating rates of other industries increased. In December, it is expected that the operating rates of most industries will continue to increase slightly. The expected copper product output, copper rod output, copper strip output, copper tube output, and copper rod output are likely to increase month - on - month, and the apparent consumption of electrolytic copper will also increase month - on - month [59][60][61]. 5.3 Price Expectation This Friday, the market sentiment was high, and the copper price increased significantly, especially in the Comex copper market, where the price reached a one - month high. The copper price can either rise or fall at the current level. From the perspective of the 2026 long - term TC/RC announced over the weekend, the confidence of funds to buy at low levels will be re - stimulated, and the probability of the copper price breaking through again will increase. If the breakthrough is less than expected and the market returns to a volatile situation, it is still advisable to buy at low levels within the range [65].