Global Copper Cathode Surplus in January; Overnight LME Copper and SHFE Copper Both Closed Lower [SMM Copper Morning Meeting Summary]

Friday, March 27, 2026
Futures: Overnight, LME copper opened at $12,264.5/mt. After touching a low of $12,282.5/mt in early trading, its center fluctuated downward. Near the close, it bottomed at $12,079/mt and finally closed at $12,120/mt, down 1.33%. Trading volume reached 18,000 lots, and open interest stood at 296,000 lots, up 326 lots from the previous trading day, mainly reflecting increased short positions overall. Overnight, the most-traded SHFE copper 2605 contract opened at 95,350 yuan/mt. After touching a low of 95,900 yuan/mt in early trading, its center moved lower and bottomed at 94,950 yuan/mt, finally closing at 95,150 yuan/mt, down 0.45%. Trading volume reached 39,000 lots, and open interest stood at 188,000 lots, down 2,104 lots from the previous trading day, mainly reflecting reduced long positions overall.
[SMM Copper Morning Meeting Summary] News:
(1) On March 26 (Thursday), the International Copper Study Group (ICSG) said in its latest monthly report that the global refined copper market recorded a surplus of 17,000 mt in January 2026, compared with a surplus of 168,000 mt in December last year. Global refined copper production was 2.43 million mt in January 2026, while consumption was 2.41 million mt.
Spot:
(1) Shanghai: On the morning of March 26, the SHFE copper 2604 contract opened lower with a gap and then continued to decline. It opened at 96,250 yuan/mt, quickly fell to 95,790 yuan/mt after the opening, then continued downward to 95,450 yuan/mt. After a slight rebound, prices extended the downtrend, hitting a low of 95,070 yuan/mt, and closed at 95,160 yuan/mt. The price spread between futures contracts moved between a contango of 30 yuan/mt and a backwardation of 10 yuan/mt, while the import profit margin for the SHFE copper current-month contract ranged from a loss of 90 yuan/mt to a loss of 40 yuan/mt. Looking ahead to today, the Shanghai spot copper market is expected to remain in a tug-of-war. Supply side, according to SMM, a large volume of non-registered copper is expected to arrive in a concentrated manner next week, though actual arrivals still need further observation, and short-term supply pressure remains. Against the current backdrop of high inventory, circulating supply in the market is relatively ample, and most suppliers showed strong willingness to sell, leaving spot discounts under continued pressure. However, some suppliers have begun to show sentiment to hold prices firm. If discounts widen further, suppliers may choose to ship to delivery warehouse rather than continue selling at deeper discounts, providing some support to the lower bound of discounts. Demand side, some downstream enterprises saw increases in both order intake and shipments for this month, creating rigid demand for spot cargoes with invoices dated this month, but such cargoes were relatively hard to find in the market. In addition, the price spread between high-quality copper and standard-quality copper remained narrow, indicating that actual consumption demand dominated the market. Overall, downside room for spot discounts is limited, but upside is also constrained by high inventory and expectations for imported arrivals. Shanghai spot copper prices against the 2604 contract are expected to remain at the current discount level today.
(2) Guangdong: On March 26, spot prices of Guangdong #1 copper cathode against the front-month contract were quoted at premiums of 120 yuan/mt for high-quality copper, up 20 yuan/mt from the previous trading day; premiums of 20 yuan/mt for standard-quality copper, up 30 yuan/mt from the previous trading day; and discounts of 40 yuan/mt for SX-EW copper, up 30 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 95,625 yuan/mt, down 160 yuan/mt from the previous trading day, while the average price of SX-EW copper was 95,515 yuan/mt, down 155 yuan/mt from the previous trading day. Overall, inventory remained on a continued decline, and suppliers held prices firm accordingly, with spot trades better than the previous trading day.
(3) Imported copper: On March 26, the average warrant price fell $1/mt from the previous trading day to $68/mt (price range: $62-74/mt); the average B/L price fell $1/mt from the previous trading day to $66/mt (price range: $60-72/mt); and the average EQ copper (CIF B/L) price fell $1/mt from the previous trading day to $38/mt (price range: $32-42/mt), with quotations referring to cargoes expected to arrive in early to mid-April.
(4) Secondary copper: As of 11:30 on March 26, the futures closing price was 95,180 yuan/mt, down 320 yuan/mt from the previous trading day; the average spot premiums stood at -100 yuan/mt, down 15 yuan/mt from the previous trading day. On March 26, copper scrap prices rose 400 yuan/mt MoM, the sales sentiment index for copper scrap fell to 2.28, the procurement sentiment index fell to 2.33, and the price difference between copper cathode and copper scrap was 191 yuan/mt, down 780 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 895 yuan/mt. Intraday, copper prices retreated after rapid rise. In the afternoon, many copper scrap suppliers held prices firm and were reluctant to sell. In addition, some secondary copper rod enterprises reported that, due to the pullback in copper prices outside China this week, imported cargoes decreased, and taxable copper scrap available for purchase in the market became increasingly scarce.
Prices: On the macro front, the market had doubts about expectations for US-Iran peace talks. Coupled with US media reports that the US was formulating military plans against Iran, and Iran also stating that the US negotiation remarks were a "third deception," geopolitical risks pushed up oil prices, while expectations for US Fed interest rate hikes heated up again, putting copper prices under pressure. Fundamentals, supply side, as suppliers' willingness to sell remained relatively strong, spot cargo circulation in the market was ample; demand side, driven by the advancement of production schedules, downstream maintained just-in-time procurement. Inventory side, as of March 26, social inventory of copper cathode in major regions of China fell 18.29% WoW from last Monday, showing a sharp destocking trend. Overall, although fundamental destocking provided support for copper prices, the current market was still dominated by macro sentiment, and copper prices are expected to remain in the doldrums today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and should not use this as a substitute for their own independent judgment. Any decisions made by clients are unrelated to SMM.]