Copper Prices Surge as Oil Prices Plummet Following US-Iran Talks

The US and Iran made progress in their talks, which led to a decrease in oil prices. This reduction in oil prices boosted copper prices, causing them to pull back and ultimately close at $14,043.5/mt on Wednesday. The LME copper traded 30,300 lots with an open interest of 251,000 lots, indicating increased long positions.

The SHFE copper 2609 contract opened at 107,490 yuan/mt, touched a high of 107,500 yuan/mt, dipped to a low of 106,900 yuan/mt and finally closed at 107,040 yuan/mt. The trading volume was 46,500 lots with an open interest of 211,100 lots, also showing increased long positions.

However, the high copper prices are suppressing downstream purchases, which is putting pressure on premiums. In Shanghai, the SMM #1 copper cathode spot against the current 2608 contract quoted a premium of 230-330 yuan/mt, averaging 280 yuan/mt, up 20 yuan/mt from the previous trading day.

The US Treasury Secretary stated that the US and Iran may reach an agreement on Wednesday Eastern Time, with the Strait of Hormuz expected to reopen in the near term. This led to a significant pullback in international oil prices, which drove copper prices higher.