Core Insights - The prices of precious metals, particularly copper, have surged significantly, attracting global attention, with LME three-month copper and Shanghai copper contracts reaching historical highs [1] - The rising costs of copper raw materials have led to substantial pressure on downstream industries, with a reported 18% reduction in production among small and medium enterprises in the copper supply chain [2] - The copper industry is experiencing a shift in supply and demand dynamics, influenced by factors such as geopolitical events and currency fluctuations, alongside traditional demand stagnation [5][6] Group 1: Price Trends and Market Dynamics - Copper prices have shown a strong upward trend, reaching historical highs, with significant volatility impacting different segments of the industry [3] - The supply side is under pressure, with global copper mine supply growth at only 1.6%, while smelting capacity is expanding rapidly, leading to a potential supply shortage [6] - The demand for copper is being driven by new applications in AI and renewable energy sectors, which are expected to offset declines in traditional demand from construction and manufacturing [5][7] Group 2: Industry Challenges - Many copper smelting plants are facing operational challenges due to depleting raw material inventories and declining by-product prices, leading to increased production cuts [2][4] - The high volatility in copper prices is causing significant operational risks for midstream companies, with many opting to reduce inventory levels and even halt production temporarily [4] - The transition towards aluminum as a substitute for copper in various applications is accelerating due to rising copper costs, which may impact long-term copper demand [2][8] Group 3: Future Outlook - The market sentiment remains bullish on copper prices in the medium to long term, driven by structural supply constraints and increasing demand from emerging technologies [7][8] - The copper market is expected to experience a short-term balance but may face a structural shortage by 2026, with prices potentially exceeding 90,000 yuan per ton [7] - The copper industry is transitioning towards higher quality production and efficiency, moving away from previous expansion strategies, which may lead to increased competitiveness and innovation [8]

Core Viewpoint - The recent surge in precious metal prices, particularly copper, has drawn global attention, with significant impacts on the supply chain and production dynamics in the industry [1][5][7]. Price Dynamics - LME three-month copper and Shanghai copper futures have reached historical highs, with COMEX copper prices also hitting record levels on July 24 [1]. - The copper market is experiencing high volatility, influenced by supply-demand dynamics, financial attributes, and external factors such as exchange rates and geopolitical issues [5][6]. Supply Chain Impact - Many copper smelting plants are facing raw material inventory depletion, leading to increased production cuts, with 18% of downstream small and medium enterprises reducing output [2][4]. - The processing fees for copper have been declining, with long-term processing fees expected to drop significantly, impacting the profitability of smelting companies [3][6]. Demand Trends - Demand for copper is being driven by sectors such as renewable energy, AI infrastructure, and electric vehicles, while traditional sectors like construction and manufacturing are experiencing sluggish growth [5][6][7]. - The transition to aluminum in various applications is accelerating due to rising copper costs, potentially reducing the long-term demand for copper [2][4]. Future Outlook - The copper market is expected to face a structural shortage in the medium to long term, with supply constraints from mining and smelting sectors, while demand from new technologies continues to grow [6][7][8]. - Analysts predict that copper prices may maintain a high level of volatility in the short term but are likely to trend upwards in the long term, potentially exceeding 90,000 yuan per ton by 2026 [7][8].

Core Insights - The current spot price for 1 electrolytic copper in Shanghai is reported at 86,795.00 CNY/ton, showing a discount of 45.0 CNY/ton compared to the futures main price of 86,840.00 CNY/ton [1] - The futures market closed with the main contract for copper at 86,840.00 CNY/ton, reflecting a slight increase of 0.16%, with a trading volume of 76,287 lots [2] Industry Overview - A survey of 61 domestic refined copper rod production enterprises indicates a total capacity of 15.84 million tons, with an expected production of 756,000 tons in October 2025, representing a month-on-month decrease of 10.99% [3] - A survey of 74 sample enterprises in the recycled copper rod sector shows a total capacity of 8.19 million tons, with an anticipated production of 167,700 tons in October 2025, reflecting a month-on-month decline of 1.81% [3] - The increase in copper prices in October has notably suppressed downstream demand, leading to a significant decline in refined copper rod production [3] Market Analysis - According to a report from Guangzhou Futures, the nearing end of the U.S. government shutdown has reduced macroeconomic risks, but uncertainties in economic data continue to create speculation regarding potential interest rate cuts in December [4] - The copper market is experiencing a transmission of raw material shortages to the smelting sector due to mining accidents, with current prices showing bottom support; however, a breakthrough above previous highs requires additional positive drivers and substantial capital inflow [4] - The market is expected to trend within a range, indicating a potential for fluctuations rather than a clear upward trajectory [4]

Group 1: Report Summary - The 770th document of the National Development and Reform Commission in August 2025 included "tax rebates" in the list of illegal investment - promotion practices. Enterprises registered after May 2024 should cancel local retention rebates by the end of August, while those registered before can have a buffer until 2027. Some regions like Jiangxi and Anhui have already suspended rebates in September [2]. - The policy targets the "white - slip accounting" model in the recycled copper industry, and the practice of relying on local fiscal tax refunds of 4 - 6 percentage points is restricted, causing a sharp increase in enterprise costs [2]. - Referring to the experience of the lead industry, the recycled lead industry is in a "standardization pain period" with polarization. Leading enterprises adapt quickly, while small and medium - sized enterprises face challenges [3]. - When the scrap copper industry enters the "no - rebate era", enterprises should shift their competitiveness from "fiscal bonuses" to "real spreads", and investors should focus on local implementation rhythm and copper price rebound height [3]. Group 2: Background and Review - Since 2016, the policy orientation of the recycled metal industry has evolved from "environmental protection rectification" to "tax standardization". In the early stage, many small - scale scrap copper recycling workshops were shut down due to environmental non - compliance [10]. - Since 2019, policy focus has shifted to tax regulatory supervision. The "reverse invoicing" mechanism in 2024 marked the upgrade of the tax supervision system [10]. Group 3: Impact of Tax Policy on Domestic Scrap - related Enterprises Lead Industry Example - Before the "reverse invoicing" policy, the recycled lead industry had problems such as high tax costs, tax evasion, and environmental risks due to the lack of input tax deductions [11]. - After the implementation of the "reverse invoicing" policy, there were challenges such as data traceability difficulties, regional policy differences, and slow integration of individual recyclers [12][13]. - The recycled lead industry shows polarization. Leading enterprises' market share has reached over 50%, while small and medium - sized enterprises' capacity utilization has dropped from 75% to 45% [3][13]. Impact on Scrap Copper Enterprises - The 770th document affects the scrap copper industry. Enterprises relying on local fiscal tax refunds face cost - doubling pressure [20]. - In the worst - case scenario of full cancellation of rebates, the comprehensive tax rate of recycled copper enterprises will rise from 5.6% to 11.7% - 13.3%, and production capacity will shrink significantly. In the neutral scenario of partial cancellation, the impact is relatively mild [22]. - Enterprises should improve the proportion of taxable purchases at the raw material end, transfer taxes to downstream at the sales end, choose regions with long policy buffer periods, and use financial tools such as futures [3][24]. Group 4: Current Situation of Domestic Recycled Copper Rods - In the past 5 years, domestic recycled copper rod capacity has increased by nearly 400%, but there are many inefficient capacities. Since the second half of this year, enterprises have little profit [25]. - From January to July 2025, domestic scrap - produced blister copper output increased by 13.60% year - on - year, while scrap copper imports decreased by 0.5% year - on - year. The loss of the US as an import source may limit future import growth [26]. Group 5: Summary and Hedging Strategy Suggestions - The government's rectification of recycled resources and tax norms aims to ensure the stable supply of important resources and eliminate unfair competition. However, it may impact raw material supply in the short term [4][28]. - Considering various factors, copper prices may remain strong from September to October. Enterprises with buying hedging needs are advised to buy on dips, and those with selling hedging needs should increase hedging efforts in the price range of 84,000 - 84,500 yuan/ton [4][28].

Group 1 - LME copper futures prices showed a slight increase, opening at $9,665 per ton and currently trading at $9,689 per ton, with a peak of $9,700 per ton and a low of $9,665 per ton, reflecting a 0.16% increase [1] - On August 6, LME copper futures opened at $9,625 per ton, reached a high of $9,708 per ton, and closed at $9,681 per ton, marking a 0.50% increase [2] - The current spot price of electrolytic copper in Shanghai-London ratio is 8.11, with an import loss of -141.8 yuan per ton, improving from a previous loss of -262.02 yuan per ton [2] Group 2 - As of August 6, LME registered copper warrants totaled 145,200 tons, with canceled warrants at 10,925 tons, a decrease of 1,075 tons; total copper inventory increased by 2,275 tons to 156,125 tons [2] - A survey of 74 domestic recycled copper rod production enterprises, covering a capacity of 8.19 million tons, indicated that the actual production of recycled copper rods in July 2025 was 216,700 tons, a month-on-month decrease of 13.74% [2] - The capacity utilization rate for domestic recycled copper rods in July 2025 was 26.73%, down 5.29% month-on-month and 3.44% year-on-year [2]

Group 1 - The overall macroeconomic environment last week was neutral to slightly positive, with Trump initially pressuring Powell and rumors of his potential dismissal, which led to a temporary rebound in copper prices before being denied by Trump [1][3] - Inflation data met expectations, reflecting the impact of tariffs on inflation, which caused the market to reduce expectations for interest rate cuts later this year, putting pressure on prices [1][3] - Gold prices showed a strong performance, supported by market resilience and expectations of potential interest rate cuts, despite ongoing tariff risks [4][50] Group 2 - Last week, COMEX gold fell by 0.44% and silver by 1.66%, while SHFE gold and silver rose by 0.45% and 2.58% respectively [2] - The copper market saw a slight rebound, with SHFE copper prices returning above 79,000 yuan/ton, driven by positive sentiment from urban renewal meetings and expectations of further measures against "involution" [6][49] - The copper concentrate TC weekly index was -43.20 USD/ton, showing a slight increase, with the market remaining relatively stable [8] Group 3 - The COMEX copper price curve shifted upward, maintaining a contango structure, while COMEX copper inventories exceeded 240,000 tons, indicating potential for further accumulation [6] - The domestic market for electrolytic copper saw a slight increase in inventory, with total stocks at 144,400 tons, reflecting limited demand from downstream processing enterprises [14] - The processing fees for 8mm refined copper rods increased, particularly in East China, although overall demand remains limited due to seasonal factors [16] Group 4 - The gold and silver prices fluctuated at high levels, with COMEX gold trading between 3,314 and 3,389 USD/oz, and silver between 37.6 and 39.6 USD/oz [19] - COMEX gold inventory increased by approximately 445,000 ounces to 37.19 million ounces, while silver inventory rose by about 232,000 ounces to 49.724 million ounces [35] - The SPDR gold ETF holdings decreased by 4 tons to 944 tons, while SLV silver ETF holdings fell by 100 tons to 14,658 tons, indicating a shift in market sentiment [40]

Core Viewpoint - The waste copper market experienced significant price fluctuations over a week, driven by futures market dynamics, supply chain adjustments, and policy changes [2][6]. Group 1: Price Fluctuations - On July 10, the price of bright copper dropped by 200 yuan/ton to 72,200 yuan/ton, with a nationwide average falling to 65,000 yuan/ton, marking a single-day decline of 600 yuan, the lowest of the year [2]. - The futures market saw the main copper contract (CU888) drop over 500 yuan/ton from July 9 to 10, leading to panic selling in the waste copper market [2]. - By July 16, the main copper contract stabilized at 78,020 yuan/ton, prompting a recovery in waste copper prices, with the national average rising to 70,630 yuan/ton [2]. Group 2: Regional Price Competition - As of July 17, the price of bright copper wire in Nanyang and Xi'an reached 70,690 yuan/ton, only 10 yuan lower than Shanghai, with a previous price difference of 150 yuan a month prior [4]. - The transportation time for waste copper from North China to East China decreased from 5 days to 3 days, reducing transportation costs by 30 yuan/ton [4]. - The competition reshaped price tiers, with Nanyang and Xi'an in the top tier (70,680-70,690 yuan/ton) due to strong demand from local motor manufacturing [5]. Group 3: Quality Differentiation - On July 17, the average price of bright copper wire was 70,645 yuan/ton, while crushed yellow brass was priced at 68,230 yuan/ton, showing a price difference of 2,415 yuan [5]. - High-purity waste copper, such as bright copper wire, is increasingly viewed as "hard currency" in the market due to its critical role in battery-grade copper foil production [5]. Group 4: Market Dynamics and Policy Impact - The relationship between futures and waste copper prices is defined as: waste copper price = futures copper price × 90% - processing fee ± regional premiums [6]. - The implementation of new recycling regulations in Shanghai benefits compliant companies through a VAT refund policy, saving 420 yuan per ton of waste copper [6]. - Technological advancements, such as the use of laser sorting machines, have significantly improved waste copper recovery efficiency and purity, further driving up prices for high-grade copper [6].

1. Report Industry Investment Rating - Copper: Cautiously bullish [6] - Arbitrage: On hold - Options: short put @ 77,000 yuan/ton [6] 2. Core Viewpoints - Currently, the TC price remains extremely low, and the demand outlook is not very optimistic. However, based on the published data, the terminal performance is acceptable. With the continuous flow of inventories from Shanghai and London to the New York market, the low inventory makes the near - month contracts vulnerable to squeeze risks. Therefore, it is expected that the price will be more likely to rise than fall in the future, and the operation should mainly focus on buying hedges on dips [6]. 3. Summary by Relevant Catalogs Market News and Important Data - **Futures Quotes**: On July 8, 2025, the main contract of Shanghai copper opened at 79,370 yuan/ton and closed at 79,620 yuan/ton, a 0.44% increase from the previous trading day's close. The night - session contract opened at 79,590 yuan/ton and closed at 80,300 yuan/ton, a 0.69% increase from the afternoon close [1]. - **Spot Situation**: The spot market of electrolytic copper continued to operate weakly. The SMM1 electrolytic copper was quoted at 79,660 - 79,930 yuan/ton, with an average premium of 85 yuan/ton, narrowing by 10 yuan from the previous day. As the delivery date approaches, the spot premium may be further pressured [2]. Important Information Summary - **Macro and Geopolitical**: Trump announced a 50% tariff on imported copper starting August 1, and the US Commerce Secretary expected to issue 15 - 20 tariff letters in the next two days, with copper tariffs to be implemented in late July or on August 1 [3]. - **Domestic Policy**: The Chinese President pointed out during an inspection in Shanxi that China should build an important energy and raw material base and develop a new energy system [3]. - **Mine End**: In 2024, Chinese overseas mining investment was very active, with 10 transactions exceeding $100 million. In 2025, the strong momentum continued, such as Zijin Mining's acquisition of a gold mine in Kazakhstan and Baiyin Non - ferrous Group's acquisition of a copper - gold mine in Brazil [4]. - **Smelting and Import**: The new LME warehouse in Hong Kong attracted 100 tons of copper in "non - warrant" form before its official opening in mid - July. A large - scale copper smelting plant in Tongling achieved carbon neutrality [4]. - **Consumption**: In June 2025, the actual output of domestic recycled copper rods was 251,200 tons, a 7.11% month - on - month increase and a 0.06% year - on - year decrease. The planned output in July is 240,200 tons, a 4.41% month - on - month decrease and a 1.11% year - on - year increase [5]. - **Inventory and Warehouse Receipts**: LME warehouse receipts increased by 2,125 tons to 102,500 tons, SHFE warehouse receipts decreased by 2,573 tons to 19,109 tons, and the domestic electrolytic copper spot inventory was 142,900 tons, an increase of 11,100 tons from the previous week [5]. Strategy - **Copper**: Adopt a cautious and bullish strategy, mainly buying hedges on dips [6]. - **Arbitrage**: Put on hold [6]. - **Options**: short put @ 77,000 yuan/ton [6]

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core View The easing of mutual tariffs between China and the US has led to expectations of a rush to export, but the traditional off - season for consumption is approaching. The domestic electrolytic copper social inventory has increased compared to last week, which may cause the Shanghai copper price to fluctuate widely. It is recommended that investors wait and see, paying attention to the support and pressure levels of Shanghai copper, London copper, and US copper [4]. 3. Summary by Related Content Market Data - **Shanghai Copper Futures**: On May 19, 2025, the closing price of the active contract was 77,820, down 320 from the previous day; the trading volume was 82,415 lots, an increase of 10,104; the open interest was 171,235 lots, a decrease of 9,255; and the inventory was 61,913 tons, a decrease of 1,334 [2]. - **Spot Prices and Basis**: The average price of SMM 1 electrolytic copper was 78,110, down 720; the Shanghai copper basis was 290, down 400; the spot premiums and discounts in different regions showed varying degrees of decline [2]. - **Spread**: The spread between near - month and far - month contracts of Shanghai copper showed minor changes, with the spread between near - month and continuous - first contracts increasing by 10, and the spreads between continuous - first and continuous - second, continuous - second and continuous - third contracts decreasing [2]. - **London Copper and COMEX Copper**: The LME 3 - month copper futures closing price (electronic trading) was 9,523.5, up 76; the total inventory of registered and cancelled warrants was 0, a significant decrease of 174,325; the COMEX copper futures active contract closing price was 4.6635, down 0.02, and the total inventory weight was 170,380, an increase of 1,817 [2]. Industry News - **Mine Operations**: The Zaldivar copper mine in Chile has received environmental approval to extend its operation until 2028; the Antamina copper mine in Peru has started to resume production; some mines in Poland, Kazakhstan, and other places have suspended production due to various reasons [2][4]. - **Production and Expansion Projects**: Multiple copper mine and smelter projects have production, expansion, or suspension plans. For example, the ACS - Metalstopes metal mine's fluidized copper ore expansion project will be put into production in Q1 2020; the second - phase project of some copper mines may increase production capacity in 2025 [4]. - **Trade and Policy**: The US budget resolution includes tax cuts and debt ceiling increases; the US economic data may lead to Fed rate cuts; trade disputes and export policies affect copper trade, such as the export approval and higher export tax for Indonesian copper concentrate [3][4]. Downstream Market - **Copper Rod Enterprises**: The new orders and long - term order executions of refined copper rod enterprises have significantly decreased, and the capacity utilization rates of refined and recycled copper rod enterprises have increased, with changes in raw material and finished product inventories [4]. - **Other Downstream Products**: The capacity utilization rates of various copper products such as copper wires and cables, electrolytic copper rods, recycled copper rods, copper clad wires, steel strips, copper foils, copper tubes, and brass rods may decline due to factors such as high copper prices, trade policies, and market demand [4].

Price Movements - Copper prices have shown a slight increase, with the price at 78,480 CNY/ton, up by 150 CNY/ton [2] - The price of electrolytic copper in Guangdong has seen a rise, with market quotations for flat copper increasing by 130-200 CNY/ton [3] - The price of recycled copper has also increased, following the upward trend in copper prices [4] Inventory Trends - Copper inventory in the LME has decreased by 400 tons, totaling 197,300 tons [2] - The Shanghai Futures Exchange (SHFE) copper inventory has significantly dropped by 27,446 tons, now at 89,307 tons [2] - Post-holiday, the electrolytic copper inventory in Guangdong is expected to continue to accumulate slightly due to increased arrivals [3] Market Dynamics - The market for recycled copper is experiencing a recovery in trading atmosphere, with downstream copper plants actively seeking to replenish their stocks after the holiday [4] - There is a mixed response from downstream copper manufacturers regarding procurement, with some showing strong demand while others remain cautious [4] - The trading volume for copper rods in Guangdong has been stable, with a notable demand for replenishment after the holiday [5]