Report Summary 1. Report Industry Investment Rating No investment rating was provided in the report [1] 2. Core View of the Report Due to uncertainties in Sino - US trade tariff policies, expectations of future Fed rate cuts and halt of balance - sheet reduction, and production disruptions in overseas copper mines, the price of Shanghai copper is expected to be cautiously bullish [1] 3. Summary by Relevant Catalogs Market Data Summary - **Shanghai Copper Futures**: On October 20, 2025, the closing price was 85380, up 990 from the previous day; trading volume was 158661 lots, up 37611; open interest was 226910 lots, up 11337; inventory was 41319 tons, down 1530 [1] - **LME Copper Futures**: The closing price of the 3 - month copper futures (electronic trading) on October 20, 2025, was 10712.5, up 105.5 from the previous day; the 0 - 3 - month contract spread was - 23.35, down 6.52; the 3 - 15 - month contract spread was 99.11, down 10.51 [1] - **COMEX Copper**: On October 20, 2025, the total inventory weight was 346616, up 1964 from the previous day, and the price was 5.0485, up 0.06 [1] Supply - Demand Logic - **Supply Side**: There are production disruptions in multiple copper mines at home and abroad, resulting in a negative China copper concentrate import index, a tight supply - demand expectation for domestic copper concentrates, difficult scrap copper procurement, an increase in the processing fees of domestic blister copper or anode plates, and an increase in the maintenance capacity of copper smelters in October [1] - **Demand Side**: Domestic electrolytic copper holders have a weak willingness to sell, leading to low purchasing sentiment among downstream buyers [1] - **Inventory Side**: China's electrolytic copper social inventory increased compared to last week; LME's electrolytic copper inventory decreased compared to last week; COMEX copper inventory increased compared to last week [1] Trading Strategy Investors should mainly establish long positions after price corrections. Pay attention to the support levels of 80000 - 83000 and resistance levels of 86000 - 89000 for Shanghai copper; support levels of 9500 - 10200 and resistance levels of 11000 - 12000 for LME copper; support levels of 4.0 - 4.5 and resistance levels of 5.5 - 6.0 for COMEX copper [1]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core View of the Report - Due to uncertainties in Sino - US trade tariff re - imposition, expectations of future Fed rate cuts and halt of balance - sheet reduction, and production disruptions in multiple overseas copper mines, the price of Shanghai copper is expected to be weak first and then strong. The report suggests waiting for the price to fall before laying out long positions [1] Group 3: Summary Based on Related Data 1. Shanghai Copper Data - On October 14, 2025, the Shanghai copper inventory was 36,295 tons, an increase of 3,405 tons from the previous day; the SMM 1 electrolytic copper - semi average price was 86,668.945, the SMM premium copper open - discount - average price was 100, the Shanghai copper basis was 1,580, and the trading volume was 210,984 lots, a decrease of 80,438 lots from the previous day [1] 2. London Copper Data - On October 14, 2025, the LME 3 - month copper futures closing price (electronic trading) was 10,598.5, a decrease of 203.5 from the previous day; the LME copper futures 3 - 15 - month contract spread was 153, a decrease of 56.5 from the previous day; the LME copper futures 0 - 3 - month contract spread was 54.87, a decrease of 171.91 from the previous day [1] 3. COMEX Copper Data - On October 14, 2025, the total COMEX copper inventory was 342,280, an increase of 2,755 from the previous day; the copper futures active contract closing price was 4.998, an increase of 0.15 from the previous day; the open interest was 187,566 lots, a decrease of 14,265 lots from the previous day [1] 4. Price Ratio and Premium Data - On October 14, 2025, the Shanghai - London copper price ratio was 7.9643, an increase of 0.08 from the previous day; the SMM Yangshan copper premium (warehouse receipt) - average price was 110, and the SMM Yangshan copper premium (bill of lading) - average price was 53, a decrease of 1 from the previous day [1]

Core Insights - The report highlights that the global top 24 copper mining companies produced 7.41 million tons in H1 2025, reflecting a year-on-year increase of 200,000 tons, with a growth rate of 2.8% [1][2] Group 1: Production Insights - The production guidance completion rate for top copper mining companies in H1 2025 was 49%, aligning with expectations [2] - Among the 24 copper mining companies, only 9 experienced a decline in production growth year-on-year, primarily due to lower ore grades, recovery rates, and external disruptions such as water resource limitations [1][2] - Major contributors to the production increase included Rio Tinto (+110,000 tons), China Molybdenum (+100,000 tons), Codelco (+60,000 tons), and Zijin Mining (+50,000 tons) [1][2] Group 2: Future Supply Trends - The production guidance for top copper companies in 2025 has been revised downwards, now expected to grow by only 1.7% compared to earlier guidance of 2.8% [3] - The downward revision in production guidance is attributed to delays in tailings construction and mining accidents [3] - For H2 2025, the total expected production from top mining companies is 5.7 million tons, reflecting a year-on-year decrease of 1.9% but a quarter-on-quarter increase of 2.2% [3] Group 3: Cost and Financial Performance - The average C1 cash cost for 15 copper companies in H1 2025 was $1.72 per pound, representing a year-on-year decrease of 8.7% [4] - The decline in C1 costs was primarily due to increased copper production and strong by-product prices, with only 4 companies reporting cost increases [4] - Chinese copper companies showed growth in net profit margins and free cash flow, while overseas companies experienced declines, likely due to cost control issues and production decreases [4]

Investment Rating - The investment rating for the industry is "Positive" [3] Core Viewpoints - The global copper supply is expected to remain tight in the second half of 2025, with a projected production of 570 million tons from major mining companies, reflecting a year-on-year decrease of 1.9% [2][24] - The average C1 cash cost for major copper companies decreased to $1.72 per pound in the first half of 2025, down 8.7% year-on-year, with most companies experiencing a decline in costs due to increased copper production and strong by-product prices [3][21] - The merger of Anglo American and Teck Resources is anticipated to create a top five global copper producer, with an annual output exceeding 1.2 million tons [3][36] Summary by Sections Section 1: Supply and Demand - In the first half of 2025, the production of the top 24 copper companies reached 7.41 million tons, a year-on-year increase of 20,000 tons, with a growth rate of 2.8% [1][11] - The production guidance for 2025 has been revised downwards to a year-on-year increase of 1.7%, compared to an initial forecast of 2.8% [2][13] Section 2: Cost Analysis - The average C1 cash cost for 15 copper companies was $1.72 per pound in the first half of 2025, with only four companies reporting an increase in costs [3][21] - The decline in costs is attributed to higher copper output and favorable by-product prices, particularly for companies like Minmetals Resources and Antofagasta [25][21] Section 3: Financial Performance - Chinese copper companies showed an increase in net profit margins and free cash flow, while overseas companies experienced declines in these metrics [29][30] - The free cash flow for overseas copper companies dropped by an average of 54%, contrasting with a 432% increase for Chinese companies [29][30] Section 4: Strategic Developments - Freeport-McMoRan is advocating for U.S. policies to boost refined copper production and is exploring copper scrap as a potential source [36] - The Cobre Panama mine is under consideration for a restart in early 2026, with ongoing negotiations between Panama and First Quantum Minerals [36]