Report Industry Investment Rating - Copper: Cautiously bullish [7] - Arbitrage: On hold [7] - Options: short put @ 83,000 yuan/ton [7] Core Viewpoints - Overall, copper prices strengthened during the National Day holiday due to factors such as the restart of the Fed's interest - rate cut cycle and frequent mine - end disturbances. However, the continuous processing fee of - 40 dollars/ton reflects the tightening of mine - end resources, so the short - term rise in copper prices caused by mine - end disturbances may not be sustainable. When the trade dispute between China and the US intensified last Friday, copper prices fell. But low processing fees and the Fed's interest - rate cuts limit the downside of copper prices. It is recommended to buy copper on dips for hedging, with the buying range at 83,500 - 84,000 yuan/ton [7] Summary by Related Catalogs Market News and Important Data Futures Quotes - On October 16, 2025, the main Shanghai copper contract opened at 85,240 yuan/ton and closed at 85,050 yuan/ton, down 0.87% from the previous trading day's close. The night - session main contract opened at 84,530 yuan/ton and closed at 85,140 yuan/ton, up 0.08% from the afternoon close [1] Spot Situation - According to SMM, the spot price of SMM 1 electrolytic copper was at par to a premium of 120 yuan/ton, with an average premium of 60 yuan, down 60 yuan from the previous day. The copper price was 84,900 - 85,450 yuan/ton. The futures price first fell and then rose. The cross - month spread fluctuated between C50 and C20 yuan/ton, and the import loss narrowed to less than 1,000 yuan. The procurement and sales sentiment in the market rebounded. It is expected that downstream stocking willingness will be limited today, copper prices will fluctuate around 85,000 yuan, and spot trading volume may be similar to today [2] Important Information Summary - Interest rates: There is a divergence within the Fed on the interest - rate cut path. Governor Waller advocates a cautious 25 - basis - point cut per time, while Acting Governor Milan calls for a more aggressive 50 - basis - point cut. The core of the divergence lies in the speed of policy adjustment [3] - Geopolitics: Trump said he had a phone call with Russian President Putin, is committed to resolving the Ukraine conflict, and will meet with Putin in Budapest to discuss ending the conflict. They also discussed post - conflict trade between Russia and the US [3] Mine End - BHP is considering reopening four long - closed copper mines in Arizona. The potential restart plan will focus on the Globe–Miami area, and it also plans to reprocess the tailings of closed operations. The most important copper project in the state, the Resolution copper project, is still waiting for court rulings and final permits. Once operational, it can produce up to 1 billion pounds (about 453,000 tons) of copper per year [4] Smelting and Import - Japan, Spain, and South Korea are deeply concerned about the sharp decline in copper smelting processing fees and refining fees (TC/RCs). The current market environment hinders the sustainable development of the copper smelting and mining industries. Some companies are considering scaling back or exiting copper concentrate smelting operations, and they hope TC/RCs can return to a sustainable level [4] Consumption - In September 2025, China's non - ferrous metal industry prosperity index was 30.4, up 0.1 percentage point from last month, remaining in the lower - middle part of the "normal" range. The leading index was 70.4, up 0.4 percentage points, and the coincident index was 69.7, down 2.1 percentage points. In September, new energy vehicle production and sales reached 1.617 million and 1.604 million respectively, up 23.7% and 24.6% year - on - year. From January to September, new energy vehicle production and sales were 11.243 million and 11.228 million respectively, up 35.2% and 34.9% year - on - year [5] Inventory and Warehouse Receipts - LME warehouse receipts decreased by 450 tons to 137,450 tons. SHFE warehouse receipts decreased by 125 tons to 44,406 tons. On October 17, the domestic electrolytic copper spot inventory was 177,500 tons, an increase of 5,500 tons from the previous week [6] Strategy - Copper: It is recommended to buy on dips for hedging, with the buying range at 83,500 - 84,000 yuan/ton [7] - Arbitrage: On hold [7] - Options: short put @ 83,000 yuan/ton [7]

Report Summary Core View - Recent COMEX copper prices have fallen significantly by nearly 20% due to the implementation of US copper tariffs, and the spread between COMEX and LME copper has narrowed from nearly $3000 to less than $1000. The exclusion of refined copper from tariffs may lead to an increase in US refined copper imports and a return of copper processing enterprises to the US [2]. - From the supply - demand side, copper mine supply remains tight, processing fees are at a low level, and demand is weak in the off - season with copper rod开工率 falling and terminal consumption dropping. Copper inventory has accumulated again, and refined copper supply - demand has weakened [3]. - Looking ahead, COMEX copper has fallen, and the C - L spread is approaching the historical average. Conditional spot investors can conduct short - selling arbitrage operations on COMEX copper, and pay attention to the long - LME and short - SHFE copper cross - market arbitrage [4]. Latest Dynamic and Reasons - The US will impose a 50% tariff on imported semi - finished copper products and copper - intensive derivatives starting from August 1, but refined copper is excluded, which is different from market expectations. This may lead to an increase in US refined copper imports and a return of copper processing enterprises to the US [2]. Fundamental Situation - Supply side: Copper mine supply is tight, processing fees are at a low level, and the production guidance of some copper mines has been lowered, increasing the production risk of smelters [3]. - Demand side: In the off - season, copper rod开工率 has declined, terminal consumption such as household appliances has decreased, and copper inventory has accumulated again, and refined copper supply - demand has weakened [3]. - Other factors: The Fed maintained the benchmark interest rate in July, the expectation of a September rate cut has decreased, and investors are becoming more cautious as the expiration date of the reciprocal tariff approaches [3]. Summary and Strategy - Spot investors with conditions can conduct short - selling arbitrage operations on COMEX copper according to their own situations [4]. - Pay attention to the long - LME and short - SHFE copper cross - market arbitrage due to the relatively high SHFE/LME ratio and positive import profit [4].