1. Report Industry Investment Rating - Copper: Neutral [7] - Arbitrage: On Hold [7] - Options: short put@77000 yuan/ton, short call@80000 yuan/ton [7] 2. Core View of the Report - Currently, the processing fee has rebounded, but the shortage of mine resources is difficult to change. Consumption is not expected to perform well, but with relatively stable grid orders, the overall price is expected to fluctuate. The development of the Putin-Biden meeting and the performance of the domestic equity market may impact copper prices. The report suggests a neutral stance on copper, puts arbitrage on hold, and provides option strategies [7]. 3. Summary by Relevant Catalogs 3.1 Futures Market - On August 20, 2025, the Shanghai copper main contract opened at 78,690 yuan/ton and closed at 78,640 yuan/ton, a -0.32% decline from the previous trading day's close. During the night session, it opened at 78,560 yuan/ton and closed at 78,730 yuan/ton, a 0.11% increase from the afternoon close [1]. 3.2 Spot Market - According to SMM, on the previous day, the spot price of SMM 1 electrolytic copper was at a premium of 130 - 250 yuan/ton to the current 2509 contract, with an average premium of 190 yuan/ton, a 5 yuan/ton decrease from the previous trading day. The price of SMM 1 electrolytic copper was in the range of 78,670 - 78,870 yuan/ton. The purchase and sales sentiment in Shanghai increased. It is expected that domestic supplies will continue to be supplemented, and the spot premium of Shanghai copper will face continued pressure [2]. 3.3 Important Information Summary 3.3.1 Macroeconomic - The minutes of the Federal Reserve's July monetary policy meeting showed that tariffs pose upward pressure on commodity price inflation, but the increase in the cost of imported goods including tariffs will be less than previously predicted and the time of increase will be postponed. The labor market is expected to weaken, and the unemployment rate is expected to rise above the estimated natural unemployment rate by the end of this year and remain above it until 2027 [3]. 3.3.2 Mine End - Tudor Gold has submitted an underground exploration permit application for the Treaty Creek gold-copper mine project. First Quantum Minerals has launched a $1.25 billion expansion project for the Kansanshi copper mine in Zambia, which is expected to nearly double the ore processing capacity, increase smelter capacity by about 25%, and increase the average annual copper production to 250,000 tons by 2044 [4]. 3.3.3 Smelting and Import - The Hong Kong delivery warehouse of the London Metal Exchange was inaugurated. China's refined copper production in July 2025 was 1.27 million tons, a 14% year-on-year increase. Some smelters have reduced production due to shortages of copper concentrate and scrap. In August, the number of smelters reducing production has increased compared to July [5]. 3.3.4 Consumption - The monthly prosperity index of China's copper industry in July was 41.8, up 0.9 points from June, continuing to operate in the "normal" range [6]. 3.3.5 Inventory - LME warehouse receipts decreased by 450 tons to 156,350 tons, and SHFE warehouse receipts decreased by 275 tons to 25,223 tons. On August 18, the domestic electrolytic copper spot inventory was 1.337 million tons, an increase of 81,000 tons from the previous week [6].