Investment Rating - The report downgrades CMOC-H/A and CNM to Hold from Buy, maintains Hold ratings on MMG and JXC-H/A, and retains Buy ratings on Zijin-H/A [4][7]. Core Insights - The US has announced a 50% tariff on imported copper, leading to a spike in Comex copper prices by over 10% since the announcement [2]. - Post-tariff, copper prices in China and LME are expected to decline as the current excess flow of copper into the US reverses, impacting global supply and demand fundamentals [3]. - The report expresses caution regarding the short-term outlook for the Chinese copper sector due to the normalization of US copper inventory and its effect on demand [4]. Summary by Sections US Tariff Impact - The US imports approximately 50% of its refined copper demand, primarily from Chile, Canada, and Mexico, and the tariff is expected to create a significant market shift [2]. - Comex copper prices have surged, with a current premium of about 25% over LME prices, indicating market expectations of the tariff's impact [2]. Price and Inventory Trends - Following the tariff announcement, the report anticipates a decline in copper prices as the arbitrage opportunity reverses, leading to a normalization of US copper inventory levels [3]. - Global copper inventories have shown divergence, with LME inventories declining significantly while Comex inventories have surged to their highest levels since 2018 [15]. Company Ratings and Valuations - Zijin Mining maintains a Buy rating with unchanged target prices, reflecting strong fundamentals and expected earnings growth [48][49]. - CMOC-H/A's target price remains unchanged, but the downgrade to Hold reflects concerns over short-term demand and pricing pressures [51]. - MMG and Jiangxi Copper maintain Hold ratings, with target prices unchanged, indicating a cautious outlook amid potential price declines [54][57].

Investment Rating - The report upgrades the 2H 2025 LME copper price forecast to an average of $9,890 per ton from $9,140 previously, with expectations of a peak price of $10,050 in August before declining to $9,700 by December [2][4][27]. Core Insights - The ongoing US Section 232 copper investigation has led to significant dislocation between LME and COMEX copper prices, causing over-imports of approximately 400,000 tons of copper into the US this year, resulting in US inventory levels rising to over 100 days of consumption [4][6][14]. - Despite a global surplus in the copper market, fears of a regional shortage outside the US have emerged, tightening the ex-US copper market [4][14]. - The report anticipates a 25% tariff on US copper imports by September, which is expected to impact US inventories and the overall market dynamics [4][21][43]. Summary by Sections Price Forecast - The LME copper price is expected to rise to a peak of $10,050 in August 2025, driven by tariff-related reductions in ex-US stocks and resilient activity in China [4][27][28]. - The forecast reflects a significant upward revision due to higher-than-expected US over-imports and stable Chinese economic sentiment [28][34]. Market Dynamics - The report highlights a significant backwardation in LME timespreads, indicating tightness in the market, with cash contracts trading at a premium to the 3-month contracts [4][9][12]. - The anticipated tariff could lead to a reduction in US imports, tightening the ex-US market further, while US inventories are expected to increase by 150,000 tons in Q3 before declining in Q4 [21][22]. Global Supply and Demand - The global copper market is projected to remain in a modest surplus, with a refined copper surplus of approximately 400,000 tons in the US for 2025, while deficits are expected in China and the rest of the world [14][19][20]. - The report notes a slowdown in solar demand growth, which has been a significant driver of copper demand, leading to adjustments in production forecasts for major mines [38][41].