A review of April 2026 shows that SHFE copper prices displayed a pattern of wide fluctuations with an overall upward trend, caught between shifting macroeconomic sentiment and strong fundamental support. Despite a pullback towards the month's end due to escalating geopolitical tensions, copper prices demonstrated notable resilience, closing the month with a significant 5.61% gain, bolstered by the materialization of supply-side constraints.

On the macroeconomic front, market sentiment was primarily swayed by the "US-Iran situation" and "Federal Reserve动向". Geopolitical risk premiums were volatile; US-Iran tensions cycled through phases of escalation, de-escalation, and re-escalation. Mid-month ceasefire talks briefly boosted risk appetite, but a subsequent stalemate, disruptions to shipping in the Strait of Hormuz, and heightened US sanctions reignited safe-haven demand. Soaring oil prices fueled inflation concerns, which acted as a drag on copper. The Federal Reserve maintained a neutral, wait-and-see stance, holding interest rates steady as expected. While signaling a potential for minor future hikes, the Fed's approach was not considered aggressive. Rising inflation expectations, partly driven by conflict, caused market expectations for interest rate cuts to diminish substantially, and a strong US Dollar Index exerted some downward pressure on copper prices. Domestically, supportive policies provided a floor. Positive first-quarter economic data, coupled with Politburo meetings emphasizing domestic demand expansion and computing power network construction, alongside recoveries in real estate and manufacturing PMIs, bolstered market confidence. China's April manufacturing PMI edged up 0.1 percentage points, remaining in expansion territory, while the composite PMI, though down 0.4 points, stayed above the 50-point threshold, indicating continued economic expansion.

Fundamentally, supply-side dynamics were the core driver supporting high copper prices throughout the month, characterized by "worsening mine supply shortages and diverging demand patterns." The supply side provided strong support as global copper mine supply disruptions intensified. Southern Copper Corp.'s Q1 output fell 4.0% year-on-year (with a 9.8% drop in Peruvian operations), while Anglo American's production was flat. Output declined in Chile, and risks of sulfuric acid shortages worsened due to the Middle East situation and Chinese export restrictions, leading to a sharp increase in smelting costs. Domestic copper concentrate treatment and refining charges (TC/RCs) continued to fall to historic lows, increasing pressure on loss-making smelters and leading to downward revisions in refined copper production forecasts, reinforcing the supply tightness narrative. On the inventory front, a continued drawdown provided strong support. Although LME inventories remained high, domestic social inventories saw significant depletion. Benefiting from seasonal restocking for the "Silver April" peak period and essential downstream restocking, SHFE inventories hit a new cyclical low, with solid spot premiums effectively limiting downside price movement. Demand exhibited a clear "K-shaped" divergence. Traditional sectors like property and home appliances were subdued, but robust demand emerged from new sectors—incremental demand represented by photovoltaics, new energy vehicles, exports of the "new three" items, and AI computing center construction became key pillars supporting copper consumption.

In summary, April's copper price action validated its characteristic sensitivity to macro factors underpinned by solid fundamentals. Although geopolitical risks caused a late-month pullback, extremely low processing fees and persistent inventory drawdowns indicate the copper market's tight supply-demand balance remains intact. In the near term, the market is expected to continue seeking a new equilibrium between macroeconomic uncertainties (geopolitics, the Fed) and the strong fundamental reality.

Price charts for April 2026 illustrate these trends. The Yangtze River spot 1# copper average price was reported at 100,523.81 yuan/ton, a daily average increase of 282.86 yuan, up 1.88% from the March 2026 average (98,671.36 yuan) and up 30.73% from the April 2025 average (76,893.33 yuan). The SHFE copper settlement price averaged 100,265.24 yuan/ton for the month, a 5.61% monthly gain, with a daily average increase of 330.95 yuan, up 1.95% from March 2026 (98,349.09 yuan) and surging 30.84% from April 2025 (76,632.38 yuan). LME copper prices also rose before a slight retreat, averaging $12,990.05/ton for the month, a daily gain of $39.70, up 3.306% from March 2026 ($12,604.57) and up 40.68% from April 2025 ($9,233.90).

Inventory data showed a clear divergence. Domestic SHFE copper inventories fell consistently, decreasing by 167,110 tons in April to 192,025 tons, a 46.53% drop from March 2026 (359,135 tons), hitting the lowest level since January 9, 2026 (180,543 tons). This confirms robust consumption during the domestic "Silver April" peak season, reflecting sustained domestic demand recovery. However, compared to April 2025's total inventory (89,307 tons), there was a 115.02% increase, indicating that the peak season strength in 2026 was weaker than the previous year's level. Conversely, LME copper inventories continued accumulating from March, though the pace slowed noticeably, rising by 37,300 metric tons in April to 399,725 metric tons, a 10.29% increase from March 2026 (362,425 tons) and a 99.71% surge compared to April 2025 levels (200,150 tons), reaching the highest level since March 28, 2018 (388,175 tons), representing a significant historical high that acts as a clear drag on prices.

Macro developments globally included a mixed US economic picture. The labor market showed resilience with strong ADP job gains and low unemployment claims, but this reflected corporate caution regarding tariff policies and immigration reform. Inflationary pressures intensified significantly, driven by energy prices, with March CPI hitting a two-year high. The manufacturing PMI rose strongly, but services PMI was weak, indicating a structurally uneven recovery. The Fed held rates steady, with market expectations for cuts diminishing and hikes gaining some probability; Chairman Powell, in his final meeting, emphasized a watchful stance regarding inflation impacts from conflict. Trade policy saw adjustments to metal tariffs. In the Middle East, a fragile ceasefire broke down, reigniting risks, particularly concerning the Strait of Hormuz, pushing oil prices higher and fueling global inflation and safe-haven flows into the US dollar. Europe faced severe "stagflation" concerns, with rebounding inflation and weak confidence, pressuring the ECB. Globally, central bank policies diverged.

Domestically, the economy started the year strong with Q1 GDP growth of 5.0%, driven predominantly by domestic demand. Industrial profits improved markedly, especially in high-tech sectors. PPI turned positive, signaling an end to industrial deflation. Policy remained precisely supportive, with liquidity kept ample and structural tools targeting green industries and technological innovation. Financially, credit growth was mixed, with strong corporate lending but weak household borrowing, and foreign investment saw a shift towards high-tech sectors despite an overall decline.

On the supply side, mine disruptions were frequent. Global supply growth slowed, with output declines in Chile and from major producers like Southern Copper and issues at Escondida. Unexpected events in the DRC, Indonesia, and Zambia exacerbated shortages. Treatment charges collapsed to historic lows, even turning negative, reflecting extreme raw material scarcity. The smelting sector faced a dual squeeze from a "sulfuric acid crisis"—with prices soaring due to Middle East tensions and potential Chinese export restrictions threatening SX-EW operations—and a seasonal maintenance cycle, expected to impact significant production volumes. The price spread between refined and scrap copper inverted, highlighting tight refined supply. Inventory trends diverged: domestic stocks accelerated their drawdown, falling to a four-month low, confirming peak season demand, while overseas LME and COMEX inventories remained at elevated levels, capping price gains.

Demand was driven by new sectors. The AI computing boom is reshaping copper demand logic, increasing usage in servers, network gear, and related power infrastructure like data centers. Exports of the "new three" (EVs, batteries, solar panels) remained strong, and power grid investment ran high, supporting copper consumption. Traditional sectors showed marginal improvement; the property market saw a "small sunny spell" but new construction remained weak, and high prices dampened building-related copper demand. The auto sector was split between hot exports and cool domestic sales, while home appliance demand provided limited support. Factory operating rates stayed high, supported by grid and new energy orders, but high prices began to inhibit new orders in late April. Spot consumption saw inventory drawdowns slow under high prices, but premiums remained firm due to tight holder supply and low inventory support.

The core conclusion for April is that the market operated under the intertwined shadows of macroeconomic "stagflation" and industrial "supply-demand mismatches." Overseas, volatile Middle East tensions kept energy prices high, exacerbating inflation and global slowdown fears. The Fed's hawkish hold led to a sharp drop in rate cut expectations. Domestically, a strong economic start and policy support showcased resilience amid a "K-shaped" divergence, with robust demand from new productive forces like AI and NEVs offsetting traditional sector weakness. Copper's fundamental logic remained strong. Supply was squeezed by mine shortages and soaring acid costs, with TCs/RCs breaking historic lows. Demand was led by new areas like AI and green energy, successfully countering traditional softness and establishing an inventory drawdown inflection point, providing solid price support. Overall, April copper prices showed strong resilience, caught between macro headwinds (strong dollar, high inflation) and fundamental tailwinds (low stocks, new demand). Supply-side "black swan" events and structural demand explosions constituted the core logic for high price levels.

Looking ahead to May, the copper market is driven by "supply hard constraints + new demand cycle + high macro volatility." The price center is expected to shift significantly higher, but with amplified fluctuations. Tight supply and demand entering a new cycle driven by "new energy + AI computing" support an upward shift in the LME copper price range to $13,000-$15,000/ton and the SHFE main contract to 104,000-107,000 yuan/ton. Key variables include navigation conditions in the Strait of Hormuz and the policy stance of the incoming Fed Chair. Investors must remain vigilant regarding macro headwinds like a strong dollar and high rates testing demand. Copper's fundamentally tight balance is expected to persist. It is advised to monitor potential disruptions from sulfuric acid export policy changes. Prices may continue their upward trend, with attention on the 105,000 yuan/ton spot level high.