1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - Entering March, the estimated output of refined copper in China is expected to rebound. With the resumption of work and production in downstream industries and the reduced substitution advantage of scrap copper, the supply surplus is expected to narrow. Overseas demand is expected to improve, and the pressure of inventory accumulation will ease. - At the macro - level, the ongoing Middle East conflict has increased inflation expectations overseas, raising the possibility of policy tightening and the pressure of a global economic slowdown. However, under the basic assumption, the Fed will not raise interest rates, and geopolitical issues are expected to enhance the value of strategic resources. In China, the policy is relatively stable during the "Two Sessions", and the construction of a new energy system and the development of new - quality productivity continue to strongly support copper demand. - Overall, the Middle East conflict may continue to cause "pulse - type" shocks, while the support comes from the value attribute of strategic resources, tightness at the mine end, and the seasonal recovery of downstream consumption. It is expected that copper prices will fluctuate. The operating range of the main SHFE copper contract is expected to be between 97,000 - 108,000 yuan/ton, and the operating range of LME 3M copper is expected to be between 12,400 - 13,800 US dollars/ton. The operation suggestion is to wait and see or increase long positions after a pullback [9]. 3. Summary According to the Directory 3.1 Monthly Points Summary - **Supply**: The supply of copper ore remains tight. The output of the largest copper - producing country, Chile, is low, while the supply of blister copper is still relatively loose, and the processing fees are high. In February 2026, the domestic refined copper output declined, generally in line with expectations, and it is expected to rebound in March with a year - on - year increase [9]. - **Demand**: In February 2026, the apparent consumption of refined copper in China is estimated to have increased year - on - year. After the Spring Festival, downstream industries resumed work and production normally, but the estimated consumption was slightly weaker than the same period last year. The overseas manufacturing industry is relatively strong, and the demand expectation has improved [9]. - **Import and Export**: In February 2026, the loss of spot imports of SHFE copper widened in a fluctuating manner. The price difference between COMEX copper and LME copper oscillated weakly, and the price difference remained negative. COMEX inventory was transferred to LME warehouses in North America [9]. - **Inventory**: In February 2026, the inventories of the three major exchanges increased. The inventories of SHFE and LME increased significantly, while the inventory in the bonded area decreased slightly. The total inventory increased significantly, but there are still structural problems. It is estimated that the inventory accumulation in China will slow down significantly in March [9]. 3.2 Futures and Spot Market - **Market Review**: In February 2026, copper prices fluctuated and consolidated. Against the backdrop of the US - Iran negotiations and tariff uncertainties, market sentiment was volatile. Coupled with the cooling of the Fed's interest - rate cut expectations, the overall macro situation was mixed, and copper prices fluctuated at high levels. During the month, the main SHFE copper contract rose by 0.23%, and the LME 3M copper contract rose by 1.73%. The US dollar index stabilized, and the offshore RMB appreciated. At the beginning of March, copper prices fluctuated downward due to geopolitical and inventory changes [18]. - **Market Spreads**: In February 2026, the loss of spot imports of SHFE copper widened in a fluctuating manner, but the overall loss was not large. In February, the price difference between COMEX and LME copper oscillated weakly in the range. At the beginning of March, the price difference weakened, but the expectation of future tariffs has not been eliminated [21]. - **Inventory and Basis**: As of the end of February, the total inventory of the three major exchanges plus the Shanghai bonded area was about 1.284 million tons, an increase of 251,000 tons compared with the end of January and an increase of about 625,000 tons compared with the end of February 2025. The inventory structural problem still exists (COMEX inventory accounts for a high proportion, about 43%, with a year - on - year increase of 461,000 tons). In February, the LME copper inventory increased, and the COMEX copper inventory continued to increase. In terms of basis, in February 2026, the Cash/3M discount in the LME market narrowed in a fluctuating manner; the domestic basis weakened, and at the end of February, the spot price was at a discount of about 260 yuan/ton to the futures price, and the discount narrowed at the beginning of March [24][27]. - **Fund Sentiment**: As of late February 2026, the CFTC fund position remained net long, and the net long ratio rebounded to 20.8%; the proportion of long positions of LME investment funds rebounded, and the sentiment stabilized and recovered. In March, the impact on market sentiment is expected to mainly come from the geopolitical situation, US policy expectations, mine - end news, and inventory changes [30]. 3.3 Supply and Demand Analysis 3.3.1 Supply - **Copper Ore**: In 2025, the output of global sample mines was about 16.65 million tons, a year - on - year decrease of about 270,000 tons (-1.6%). According to the production guidance of listed mining companies in 2026, the copper ore output of sample mines in 2026 is expected to be about 16.86 million tons, a month - on - month increase of about 210,000 tons, with the growth rate revised down. In January 2026, the copper output of Chile, the largest copper - producing country, decreased by 3% year - on - year to 41,400 tons. Problems such as the continuous impact of accidents and the decline in ore grade have kept the country's copper output at a low level. In February, the inventory of copper concentrates at major Chinese ports rebounded slightly, and the spot supply at ports was still tight. In terms of processing fees, in February 2026, the spot TC of copper concentrates oscillated downward and then rebounded slightly but remained at a low level [35][38]. - **Refined Copper**: In February 2026, the domestic blister copper processing fees continued to rise, and the supply of cold materials remained relatively loose. The price of sulfuric acid, a by - product of smelting in the mainstream domestic regions, increased, making a positive contribution to smelting revenue. Affected by the reduction in days, the Spring Festival holiday, and the statistical cycle of some enterprises, the output of SMM China's refined copper decreased month - on - month in February 2026, which was basically in line with expectations. In March 2026, with relatively sufficient cold material supply and fewer smelter overhauls, the output of refined copper is expected to increase and maintain a year - on - year increase [41][45]. - **Recycled Copper**: In February 2026, the average price difference between refined and scrap copper in China was about 3,138 yuan/ton, narrowing month - on - month. Under the influence of the uncertainty of local tax rebate policies and the Spring Festival, the substitution advantage of scrap copper weakened. In February, the operating rate of recycled copper rod enterprises continued to be weak. The tax rebate policy still had a great impact on the production of recycled copper rods. At the same time, the narrowing of the refined - scrap price difference increased the advantage of producing blister copper/anode plates, and the direct substitution volume of scrap copper was still small [48]. 3.3.2 Demand - **China**: Assuming stable net imports, the apparent consumption of domestic refined copper in February is estimated to be 1.15 million tons, a month - on - month decrease and a slight year - on - year increase. From January to February 2026, the cumulative apparent consumption was about 2.403 million tons, a year - on - year increase of 3.5%. In February 2026, the domestic official manufacturing PMI fell below the boom - bust line, while the Caixin manufacturing PMI remained above the boom - bust line, showing a divergence in manufacturing prosperity. In 2025, the cumulative output of copper products in China increased by about 4.7%, with the growth rate declining month - on - month. In February 2026, the average operating rate of copper product enterprises decreased, and it is expected to rebound significantly in March, slightly lower than the same period last year. In February 2026, the operating rate of China's refined copper rod enterprises decreased due to the Spring Festival holiday, with the average operating rate slightly lower than the same period in 2025, and the post - holiday resumption of work was relatively stable. The operating situation of domestic wire and cable enterprises in February was slightly better than expected, and the operating rate is expected to rebound in March. In December 2025, the year - on - year decline of power investment (power supply + grid) continued to expand; the new installed capacity of photovoltaic continued to decline year - on - year but increased month - on - month, with an expected marginal improvement. The new installed capacity of wind power increased both year - on - year and month - on - month, and the relevant demand was better than expected. In March, the production schedule of photovoltaic modules is expected to pick up. In February 2026, the domestic real - estate transaction data was slightly weaker than the same period last year. In February, the production schedule data of home appliances in the real - estate backend was affected by the Spring Festival date difference and high base, with a large year - on - year decline, and the decline is expected to narrow in March; the high - frequency data of automobile sales in February was weak year - on - year [51][54][57][60][63]. - **Overseas**: In February 2026, the manufacturing industries of major overseas economies were in good condition. The manufacturing PMIs of the US and the UK declined slightly, while the manufacturing PMIs of the eurozone, Japan, and India increased. The US ISM manufacturing index was 52.4, maintaining a relatively strong performance above the boom - bust line. According to ICSG data, in December 2025, the global refined copper consumption decreased by 5.7% year - on - year, and the annual consumption in 2025 increased by about 3.2% [66]. 3.4 Macro Analysis - **Fed Policy**: In January 2026, the US unemployment rate declined, and inflation data weakened, with core inflation in line with expectations. As the geopolitical conflict intensified in March, the rise in oil prices increased the upward pressure on inflation expectations. The probability of a short - term interest - rate cut remained low, but the probability of a shift in the Fed's monetary policy was also small. In February 2026, the US dollar index stabilized. After Trump nominated Warsh as the next Fed chairman, the decline of the US dollar eased. In March, affected by the geopolitical conflict, safe - haven funds pushed up the US dollar index; the 10 - year US inflation expectation gradually stabilized, still deviating from the copper price trend [71][73].