Morning Insight: December 31, 2025

Morning Insight:December 31, 2025 LinlinGaoCertification：Z0002332gaolinlin@gtht.comYu Chen Wu (Contact)Certification：F03133175 wuyuchen@gtht.com Main Body Commodity MarketInsight： Copper:Prices have resumed their upward move after a pullback, with thelong-term bullish drivers unchanged. On the supply side, Chinese copper smelters have finalized the 2026 long-term benchmark TC for copper concentrates with Chilean miner Antofagastaat USD 0/ton, marking the first time in history that a“zero treatmentcharge”benchmark has been set. In addition, the policy article“Vigorously Promoting the Optimization and Upgrading of TraditionalIndustries”emphasizes preventing blind investment and disorderlyexpansion in resource-constrained industries such as copper smelting,while encouraging mergers and restructuring among leading enterprises toenhance industry competitiveness. This could accelerate structuralchanges within the smelting sector. On the demand side, expectations for a long-term recovery remain strong,and the consumption logic tied to emerging sectors such as data centersis difficult to invalidate.Copper: Prices have resumed their upward moveafter a pullback, with the long-term bullish drivers unchanged. On the supply side, Chinese copper smelters have finalized the 2026 long-term benchmark TC for copper concentrates with Chilean miner Antofagastaat USD 0/ton, marking the first time in history that a“zero treatmentcharge”benchmark has been set. In addition, the policy article “Vigorously Promoting the Optimization and Upgrading of TraditionalIndustries”emphasizes preventing blind investment and disorderlyexpansion in resource-constrained industries such as copper smelting,while encouraging mergers and restructuring among leading enterprises toenhance industry competitiveness. This could accelerate structuralchanges within the smelting sector. On the demand side, expectations for a long-term recovery remain strong,and the consumption logic tied to emerging sectors such as data centersis difficult to invalidate. Data center construction is a long-termtrend; recent fundraising and project rollouts have further boostedinvestor confidence. Moreover, data centers are driving grid upgrades andexpansion of grid connections, which will rapidly lift copper demand forcables, transformers, and related equipment. In addition, demand from newenergy sectors and regions such as Southeast Asia still has room to grow. Key risks lie in the possibility that elevated prices significantlysuppress domestic demand, leading to rising inventories and weaker spotprices. From a trading perspective, short-term corrections in copperprices are viewed as favorable entry points forlong-term bullishpositioning, with a buy-on-dips strategy recommended. Live Hogs:Spot hog prices rebounded sharply in late December, mainlydriven by a structural shortage of standard-weight hogs following heavypre–Winter Solstice sell-offs. The overall change in total inventorylevels has been limited. Although large integrated producers increasedsupply toward month-end, the widening fat-to-standard hog price spreadgenerated a renewed positive feedback loop, encouraging independentfarmers to hold back sales. As a result, pen utilization rates on thesocial supply side rebounded and inventories began to rebuild, pushing spot market sentiment to a short-term peak and shifting supply pressureinto January. Given the faster-than-usual slaughter pace in December, large producers’January marketing plans may be slightly reduced. However, with nearly 10days around the February Spring Festival during which hog marketing isdifficult, supply is likely to be proactively pulled forward into Januaryto avoid excessive pressure in the post-holiday off-season. Meanwhile,seasonal demand in early to mid-January is unlikely to show a meaningfulincrease, and may fall short of levels seen in mid-to-late December. At current levels, live hog prices have risen too quickly, and downstreamresistance has already emerged, forming a negative feedback loop. Assuch, spot prices are expected to lack upside momentum in January, with arising probability that concentrated supply pressure will be realized.From a trading perspective, attention should be paid to shortopportunities on nearby contracts at elevated levels. Open Interest Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch News Highlights: 1. China has allocated 62.5 billion yuan (about 8.88 billion U.S. dollars) in ultra-long special treasury bond funds in advance to supportthe trade-ins of consumer goods for 2026, the country's top economicplanner said Tuesday. The funds--the first to support the trade-in program for 2026--wereinitiated by the National Development and Reform Commission (NDRC) andthe Ministry of Finance, the NDRC said. The move aims to ensure policy continuity and meet surging consumption dem