1. Report Industry Investment Rating - The investment rating for the copper sector is "oscillating bullish" [1] 2. Core View of the Report - The core driver for copper prices breaking through historical highs is the concern about potential US tariffs on refined copper, which has led to a shift in global copper liquidity towards the US. Statements from the Fed Chair have also re - priced inflation and policy independence, benefiting metals with strong financial attributes like copper [1] 3. Summary by Relevant Catalogs Market Quotes - The night - session closing price of the main Shanghai copper contract CU2603 was 106,900 yuan/ton, a 4.38% increase from the previous night - session closing price. The second - main contract CU2604 closed at 107,170 yuan/ton, with a 4.34% increase. As of 06:00, the COMEX copper main contract HGH26E closed at 6.282 US dollars/pound (equivalent to 96,197 yuan/ton after exchange - rate conversion), up 4.75% from the previous trading day. The LME copper main contract CA03ME closed at 13,705 US dollars/ton (equivalent to 95,195 yuan/ton after exchange - rate conversion), with a 4.73% increase [1] Important Information - Southern Copper's CFO expects the company's copper production to be 91.14 million tons in 2026, slightly over 90 million tons in 2027, lower than the 95.43 million tons in 2025 due to declining ore grades at major Peruvian mines [1] - Zambia's copper production in 2025 was about 89.03 million tons, an 8% increase from 82.55 million tons in 2024, but it failed to reach the 100 - million - ton target [1] - Deutsche Bank predicts that copper prices will reach a peak of 13,000 US dollars per ton in the second quarter and then decline in the second half of the year as production at major mines may increase [1] - A CITIC Securities research report states that the upward trend of copper - clad laminate prices is clear, with a potential gross - margin increase of over 10 percentage points, and is optimistic about the performance and stock - price elasticity of related leading companies [1] Market Logic - The fear of US tariffs on refined copper has caused a change in global copper liquidity. LME copper inventory in Europe has dropped from nearly 7 million tons to less than 1.4 million tons since April, while COMEX copper inventory has risen from less than 100,000 short tons to over 570,000 tons since April. Fed Chair Powell's statements have led to a re - pricing of inflation and policy independence, benefiting metals with strong financial attributes [1] Trading Strategy - There is currently no trading strategy provided [1]

Report Summary 1) Report Industry Investment Rating - The investment rating for the copper sector in the non - ferrous metals industry is "oscillating with a downward bias" [1] 2) Core View of the Report - The core factor driving the copper price to break through the historical high is the concern about the US imposing tariffs on refined copper in the future, which leads to the concentration of global copper liquidity in the US. At the beginning of 2026, the non - commercial long and net long positions of COMEX copper, as well as the long and net long positions of LME copper investment funds, all continued to rise. The criminal investigation of Fed Chairman Powell and the Trump administration's threat to the Fed are expected to put pressure on the Fed regarding interest rate cuts, which is beneficial to metals with strong financial attributes such as gold, silver, copper, platinum, and palladium [1] 3) Summary by Relevant Catalogs Market Review - The night - session closing price of the main copper contract CU2603 was 102,860 yuan/ton, a 0.7% decline from the previous night - session closing price. The second - main contract CU2604 closed at 103,080 yuan/ton, with a decline of 0.74%. As of 06:00 on January 16, 2026, the closing price of the COMEX copper main contract HGH26E was 5.9915 US dollars per pound (equivalent to 92,063 yuan/ton at an exchange rate of 6.9698), a 1.7% decline from the previous trading day. The LME copper main contract CA03 closed at 13,148.5 US dollars per ton (equivalent to 91,642 yuan/ton at an exchange rate of 6.9698), a 0.3% decline [1] Important Information - On January 15, Codelco announced that its Ministro Hales copper mine had obtained environmental approval, with its operating life extended to 2054 and annual production capacity increased from 170,000 tons to 200,000 tons [1] - On January 15, Goldman Sachs raised its 2026 LME copper price forecast from 11,400 US dollars per ton to 12,200 US dollars per ton [1] - On January 11, China Non - Ferrous Metal Mining (1258.HK) released a production guidance, expecting a total copper production of about 484,000 tons in 2026, including about 134,000 tons of cathode copper and about 350,000 tons of blister copper/anode copper. The main and auxiliary shafts of the southeast ore body of Zhongse Feikuang Qianbi were repaired in December 2025, and the mine resumed production on January 1, 2026 [1] - On January 13, Codelco's chairman said that the company's copper production in 2026 was expected to reach 1.344 million tons, an increase of about 10,000 tons compared to 2025 [1] Market Logic - The fear of US tariffs on refined copper led to the concentration of global copper liquidity in the US, causing the LME copper inventory in Europe to decline from nearly 70,000 tons to less than 15,000 tons since April, and the COMEX copper inventory to rise from less than 100,000 short tons to over 500,000 tons. The criminal investigation of Fed Chairman Powell and the Trump administration's threat to the Fed are expected to put pressure on interest rate cuts, which is beneficial to metals with strong financial attributes [1] Trading Strategy - There is no trading strategy provided at present [1]

Group 1: Investment Rating - No information provided Group 2: Core Views - The sentiment in the copper market remains low. The Shanghai copper futures opened lower and continued to decline during the day. Although the supply is tight, the copper futures are still prone to rising and difficult to fall. The terminal demand maintains strong growth, but the copper products sector is cautious overall. After the copper price correction, the downstream purchasing willingness has increased [1] Group 3: Summary by Directory Market Analysis - The copper smelters cannot obtain profits through long - term contracts, and in the spot market, it remains weak and stable. By - products such as sulfuric acid and gold are the main profit points. The refined - scrap copper price difference has weakened but is still abnormal. The substitution advantage of scrap copper is significant, but the downstream demand is weak, and scrap copper transactions are also blocked. In January 2026, the refined copper production is expected to decline, and the merger negotiation between Rio Tinto and Glencore may increase their control of the global copper resource supply to 15%, highlighting the tight supply expectation [1] Futures and Spot Market - Futures: Shanghai copper opened lower and declined during the day - Spot: The spot premium in East China is - 100 yuan/ton, and in South China is - 115 yuan/ton. On January 15, 2026, the LME official price is 13145 US dollars/ton, and the spot premium is + 60 US dollars/ton [4] Supply Side - As of January 15, the latest data shows that the spot rough smelting fee (TC) is - 46.2 US dollars/dry ton, and the spot refining fee (RC) is - 4.80 US cents/pound [6] Fundamental Tracking - Inventory - SHFE copper inventory is 160400 tons, a decrease of 2300 tons from the previous period. As of January 15, the copper inventory in Shanghai Free Trade Zone is 105600 tons, a decrease of 5400 tons from the previous period. LME copper inventory is 141100 tons, a decrease of 500 tons from the previous period. COMEX copper inventory is 538700 short tons, an increase of 5130 short tons from the previous period [9]

Group 1 - Goldman Sachs reports that LME copper prices have surged 23% since November, exceeding $13,000, driven primarily by speculative capital inflows rather than fundamental factors [2] - The recent price increase is not attributed to the strengthening dollar, expectations of Chinese economic growth, or supply tightness outside the U.S., despite rising inventories in the U.S. and abroad [2] - Goldman Sachs correctly predicted that copper tariffs would not be announced alongside the critical minerals order signed on January 14 under Section 232, which retains the possibility of future tariffs [2] Group 2 - Goldman Sachs maintains its baseline forecast that refined copper tariffs will be announced mid-year and implemented by January 2027, indicating a shift away from relying solely on tariffs for metal supply security [3] - China's copper industry faces three major challenges: increasing dependence on foreign resources, overcapacity in the midstream processing sector, and suppressed downstream demand due to high copper prices [4]

Group 1: Investment Rating - No investment rating provided in the report Group 2: Core Viewpoints - The copper market shows a structure of strong expectations but weak reality. Although downstream demand is weak and there are concerns about tariffs and inventory imbalances, the copper price is supported by the weakening trend of the US dollar, and the copper market is unlikely to experience a sharp decline [1] Group 3: Summary by Section Market Analysis - In 2026, copper smelters cannot profit from long - term contracts, and by - products like sulfuric acid and gold are the main profit sources. The refined - scrap copper price difference is still abnormal, but the weak downstream demand restricts scrap copper trading. Five smelters plan to stop production in January, and one new smelter's operation is postponed, leading to a decline in refined copper production. The potential merger of Rio Tinto and Glencore may control 15% of global copper supply, highlighting the tight supply expectation. Terminal demand grows strongly, but the copper product sector is cautious, and high prices and year - end holidays slow down raw material procurement, resulting in a significant increase in copper inventory. The market is worried about US refined copper tariffs, and the high price suppresses downstream demand. The weakening US dollar supports the copper price [1] Futures and Spot Market - Futures: Shanghai copper opened and closed lower today with intraday fluctuations [4] - Spot: The spot premium in East China is 50 yuan/ton, and in South China is 20 yuan/ton. On January 12, 2026, the LME official price was 13310 US dollars/ton, with a spot premium of +70 US dollars/ton [4] Supply - side - As of January 12, the spot rough smelting fee (TC) is - 45.1 US dollars/dry ton, and the spot refining fee (RC) is - 4.6 cents/pound [6] Inventory - SHFE copper inventory is 122,100 tons, an increase of 5505 tons from the previous period. As of January 12, Shanghai bonded - area copper inventory is 111,000 tons, an increase of 9200 tons; LME copper inventory is 137,200 tons, a decrease of 1750 tons; COMEX copper inventory is 520,400 short tons, an increase of 3042 short tons [9]

1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - The probability of the Fed cutting interest rates in January is low, and the short - term macro support for Shanghai copper is weak. The potential merger of mining giants Rio Tinto and Glencore may increase their control of the global copper resource supply share to 15%, highlighting the tightness in the copper mine segment. There are concerns about the US advancing the proposal of refined copper tariffs, which may disrupt the balance of copper resources in other regions. The downstream spot demand is suppressed by high - priced copper, resulting in a structure of strong expectations but weak reality for copper. With the increase in copper prices, the downstream's acceptance of high prices may improve. Copper is expected to have a phased correction and a long - term upward trend [3]. 3. Summary by Relevant Catalogs 3.1 Market Analysis - **Macro aspect**: The US added only 50,000 non - farm jobs in December, below the expected 65,000, and the unemployment rate dropped to 4.4%. The probability of the Fed cutting interest rates in January is low. China's CPI in December 2025 increased by 0.8% year - on - year, and the core CPI increased by 1.2% year - on - year [3]. - **Supply aspect**: In 2026, copper smelters cannot profit from long - term contracts, and the spot market is weak. The by - products such as sulfuric acid and gold are the main profit points. The refined copper production is expected to decline in January, with 5 smelters planning to stop production and one delayed commissioning [3]. - **Demand aspect**: The terminal demand is growing strongly, but the copper products segment is cautious. High prices and the expectation of year - end holidays slow down the raw material procurement. Copper inventories have increased significantly. As of January 9, the Shanghai Futures copper inventory was 111,200 tons, a weekly increase of 36%; the cathode copper inventory was 180,000 tons, a weekly increase of 24.22% [3]. 3.2 Shanghai Copper Price Trend - This week, Shanghai copper fluctuated and rose. The weekly high was 105,500 yuan/ton, the low was 98,700 yuan/ton, the weekly amplitude was 6.85%, and the interval increase was 3.23% [6]. 3.3 Shanghai Copper Spot Market - As of January 9, the average premium/discount of East China cathode copper was 0 yuan/ton, and the average premium of South China was 5 yuan/ton. The downstream's willingness to take delivery was weak, and the holders' willingness to sell at a discount was low [11]. 3.4 LME Copper Spread Structure - As of January 9, LME copper rose 3.84% within the week, closing at $12,990/ton, with a spot premium of $70/ton [16]. 3.5 Copper Concentrate Supply - Rio Tinto and Glencore restarted merger negotiations. If the deal is completed, their share of the global copper resource supply may reach 15%. A Canadian copper miner's Chilean mine went on strike, with an expected 70% drop in production. In 2025, China's import of copper ore and concentrates is expected to be 30.26 million physical tons, a year - on - year increase of 7.43% [22]. 3.6 Scrap Copper Supply - In November 2025, the scrap copper import volume was 208,100 tons, a year - on - year increase of 19.92%. The cumulative import volume from January to November was 2.104 million tons, a year - on - year increase of 3.51%. The operating rate of recycled copper rods this week was 12.99%, a decrease of 1.72% from last week. The scrap copper substitution advantage is significant, but the transaction is blocked due to weak downstream demand [27]. 3.7 Smelter Fees - As of January 9, China's spot rough smelting fee (TC) was - $45.1/dry ton, and the RC fee was - 4.60 cents/pound. The CSPT announced a joint production cut of over 10% in 2026. The 2026 copper concentrate long - term processing fee was set at $0/ton and 0 cents/pound [31]. 3.8 Refined Copper Supply - In December 2025, SMM China's electrolytic copper production increased by 75,000 tons month - on - month, a 6.8% increase. The cumulative production from January to December increased by 1.372 million tons, a 11.38% increase. In January 2026, the refined copper production is expected to decline. In November 2025, China imported 427,000 tons of unwrought copper and copper products, and the cumulative import from January to November was 4.883 million tons, a year - on - year decrease of 4.7% [35]. 3.9 Apparent Demand - As of November 2025, the apparent copper consumption was 1.2681 million tons, a 4.06% decrease from the previous month [39]. 3.10 Copper Product Production - In December 2025, the actual production of domestic refined copper rods was 809,300 tons, a month - on - month decrease of 16.61% and a year - on - year decrease of 19.36%. It is expected to be 873,300 tons in January 2026. The total production of domestic copper tubes in December 2025 was 142,700 tons, a month - on - month increase of 44,000 tons but a year - on - year decrease of 43,500 tons [43]. 3.11 Power Grid Project Data - As of the end of November 2025, the national cumulative power generation installed capacity was 3.79 billion kilowatts, a year - on - year increase of 17.1%. The solar power installed capacity was 1.16 billion kilowatts, a year - on - year increase of 41.9%; the wind power installed capacity was 600 million kilowatts, a year - on - year increase of 22.4% [47]. 3.12 Real Estate and Infrastructure Data - From January to November 2025, the sales area of new commercial housing was 787.02 million square meters, a year - on - year decrease of 7.8%; the sales volume was 7.513 trillion yuan, a year - on - year decrease of 11.1% [53]. 3.13 Automobile/New Energy Automobile Industry Data - In December 2025, the retail sales of new energy passenger vehicles were 1.337 million, a year - on - year increase of 2.6% and a month - on - month increase of 1.2%. The cumulative retail sales from January to December were 12.809 million, a 17.6% increase. In December 2025, the retail sales of conventional fuel passenger vehicles were 920,000, a year - on - year decrease of 30% and a month - on - month increase of 2% [59]. 3.14 Global Major Exchange Copper Inventories - As of January 9, the LME copper inventory decreased by 6,350 tons to 139,000 tons, a week - on - week decrease of 4.37% and a year - on - year decrease of 47.35%. The COMEX copper inventory was 518,000 tons, a week - on - week increase of 3.63% and a year - on - year increase of 434.28%. As of January 8, the copper inventory in Shanghai and Guangdong bonded areas was 115,200 tons, continuing the inventory accumulation trend. As of January 9, the Shanghai Futures copper inventory was 111,200 tons, a weekly increase of 36%; the cathode copper inventory was 180,000 tons, a week - on - week increase of 24.22% [64][69]

Core Viewpoint - Citigroup predicts that copper prices will rise to $14,000 per ton in the next three months due to bullish momentum, but may peak this month unless new catalysts emerge [1][2]. Price Forecast - Citigroup maintains its forecast for the average copper price on the London Metal Exchange (LME) at $13,000 per ton for the second to fourth quarters [1][2]. Bullish Logic - The bullish logic driving copper prices includes market momentum, further upward positioning, and solid bullish fundamentals, which are expected to support short-term price increases [1][2]. - Key factors mentioned include U.S. cross-market arbitrage and tariff-related dynamics, demand and growth expectations, constrained copper supply, and currency depreciation tail risks [1][2]. Price Confidence - The company expresses insufficient confidence in current copper price levels, suggesting that if prices exceed $13,000 per ton, subsequent gains are likely to be retraced [1][2]. Supply and Demand Balance - Citigroup believes that the current price level will stimulate more scrap copper supply, promote the use of substitutes, and encourage copper conservation, leading to a balanced global copper spot market by 2026 [1][2]. Cross-Market Arbitrage - The sentiment of cross-market arbitrage between the LME and the New York Commodity Exchange (COMEX) is identified as a core pillar supporting recent copper price increases, though it is susceptible to uncertainties in U.S. tariff policies [1][2]. Tariff Expectations - Citigroup's basic expectation is that refined copper tariffs will ultimately not be implemented or will be alleviated through exemptions for U.S. regional partners such as Chile [1][2].

Core Viewpoint - Indonesia's chief negotiator indicated that the country may receive a refined copper tariff from the United States that is lower than 19% [1] Group 1 - The potential tariff reduction could impact Indonesia's copper export dynamics [1] - A lower tariff may enhance Indonesia's competitiveness in the global copper market [1] - The negotiations reflect ongoing trade discussions between Indonesia and the United States regarding mineral exports [1]