On the last trading day, the high backwardation structure persisted, and overall trading was sluggish [SMM Shanghai spot copper]

Published: Jul 15, 2026 15:45

Save

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the open interest for the SHFE copper 2607 contract is currently less than 2,000 lots, and the 2607 contract maintains a high backwardation against the 2608 contract. After the contract rollover, the market will officially price around the 2608 contract. Supply side, social inventory has been continuously declining recently. Arrivals of domestic and imported materials at some warehouses have been low, and the tightness of available spot supply is unlikely to ease significantly in the short term. LME data shows that the ratio of cancelled warrants on the LME has been rising continuously; coupled with the opening of the import window, subsequent import supply growth is expected to see some improvement. According to SMM, some warrants have been cancelled from LME and shipped to the Chinese market, expected to arrive at the end of this month or early next month. Demand side, downstream buyers' acceptance of high premiums is limited, market transactions are light, and suppliers have been continuously lowering their offers to secure deals. Since SMM always quotes against the front-month contract, spot premiums have been rapidly recovering due to the backwardation structure. Overall, with the support of the backwardation structure and weakening downstream consumption, Shanghai spot copper premiums against the 2608 contract are expected to remain at a premium tomorrow.

SMM July 15:

Today marks the last trading day of the SHFE copper 2607 contract, and SMM continues to quote against the front-month contract. Today, SMM #1 copper cathode spot against the front-month 2607 contract was quoted at a discount of 50 yuan/mt to a premium of 50 yuan/mt, with an average of parity, down 155 yuan/mt from the previous trading day. During morning trading, the SHFE copper 2607 contract consolidated in a narrow range, trending slightly lower overall. The opening price was 105,310 yuan/mt, and after opening, prices largely moved between 105,000 yuan/mt and 105,440 yuan/mt, with the overall price center edging down to a closing price of 105,020 yuan/mt. The backwardation spread between the front-month and the next-month contracts ranged from 290 to 440 yuan/mt, and the SHFE copper import profit margin against the 2607 front-month contract was between a profit of 400 yuan/mt and 580 yuan/mt.

During the day, Shanghai copper cathode selling sentiment was 3.08, down 0.30 day-on-day, and buying sentiment was 2.52, down 0.14 day-on-day. Historical data can be queried in the database. In early morning trading, suppliers made offers against the 08 contract for brands such as JCC, Tiefeng, and Jinchuan ISA Yongchang at premiums of 360-400 yuan/mt. Subsequently, suppliers slightly lowered their offers, with Lufang, JCC, etc. quoted at premiums of 380-400 yuan/mt, and Tiefeng, Jinguan, Jinxin, Jintun PC, etc. at 340-360 yuan/mt. High-quality copper like Guixi and Jintun large plate was quoted at premiums of 400-420 yuan/mt. In the second session, suppliers further lowered their offers, with Jinguan, Jinxin, Tiefeng, etc. gradually seeing deals at a premium of 300 yuan/mt. Registered SX-EW copper traded at premiums of 300-320 yuan/mt, while non-registered copper traded around a premium of 200 yuan/mt.

Looking ahead to tomorrow, open interest in the SHFE copper 2607 contract is currently less than 2,000 lots. The 07 versus 08 contract maintains a relatively high backwardation structure, and after the rollover, the market will officially set prices based on the 2608 contract. On the supply side, social inventory has continued to destock recently, with limited arrivals of both domestic and imported cargoes at some warehouses. The tight spot availability is unlikely to improve significantly in the short term. LME data showed the ratio of cancelled warrants on the LME continued to rise, and combined with the opening of the import window, growth in subsequent import arrivals has improved. SMM has learned that some warrants have been cancelled on the LME and shipped to the Chinese market, with arrivals expected around the end of this month or early next month. On the demand side, downstream acceptance of high premiums was limited, market transactions were subdued, and suppliers had to continuously lower their offers to achieve deals. As SMM always quotes against the front-month contract, spot premiums driven by the backwardation structure experienced a rapid recovery. Taking all factors into account, with the support of the backwardation structure and weakening downstream consumption, Shanghai spot copper premiums against the 2608 contract are expected to remain at a premium tomorrow.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

11 hours ago

Chile Allows Codelco to Retain Entire $2.42 Billion 2025 Profit as Copper Output Struggles

According to foreign media reports, Chile's government will allow state-owned copper producer Codelco to reinvest 100% of its 2025 profit, totaling approximately $2.42 billion, marking the first time the company has been permitted to retain all of its annual earnings since its establishment in 1976. The decision provides additional financial capacity for Codelco as it works to stabilise copper production while undertaking several capital-intensive projects aimed at extending the operating lives of its ageing mines. The company has accumulated more than $20 billion in debt, increasing pressure on its balance sheet as investment requirements remain elevated. In recent years, Codelco had typically been permitted to retain around 30% of its profits, with the majority transferred to the Chilean government. The financial support comes amid persistent weakness in Codelco's copper production. Following an internal review, the company revised its 2025 output to 1.308 million tonnes, almost 27,000 tonnes below its previous estimate. The revised figure represents Codelco's lowest annual production in nearly three decades and is approximately 19% below its 2021 output. Codelco's new leadership has indicated that improving profitability and project execution will take priority over pursuing aggressive production targets. The retained earnings are expected to provide greater flexibility to finance the company's investment programme internally, potentially reducing its reliance on additional borrowing while it works to improve operational performance. From a copper-market perspective, Codelco's ability to stabilise and eventually recover production remains significant given that the company accounts for around 5% of global copper supply. Allowing the miner to retain its entire 2025 profit strengthens its capacity to fund mine-renewal projects, but the impact on future copper supply will ultimately depend on whether the additional capital translates into improved project execution and a sustained recovery in production.

11 hours ago

13 hours ago

PT Freeport Indonesia Develops Kucing Liar Mine for Long-Term Copper and Gold Supply

According to foreign media reports, PT Freeport Indonesia is continuing development of the Kucing Liar underground copper-gold mine within the Grasberg minerals district in Central Papua, with initial mining targeted for 2029 and production expected to ramp up thereafter. The project is being developed as a long-term source of replacement supply as production from the Deep Mill Level Zone declines. Development of the underground deposit has been underway for several years and requires substantial investment in mine access and supporting underground infrastructure. Recent reports indicate that approximately $1.4 billion has already been invested, with a further roughly $4 billion expected through 2033 as development progresses. At full operating rates, Kucing Liar is expected to process approximately 130,000 tonnes of ore per day and produce around 750 million lb of copper annually, equivalent to roughly 340,000 tonnes, alongside approximately 735,000 oz of gold. Freeport-McMoRan currently estimates that the deposit could contribute more than 8 billion lb of copper through 2041. From a copper-market perspective, Kucing Liar represents a significant source of prospective long-term mine supply from the Grasberg district. Its development is particularly important because it is intended to help offset declining output from mature underground areas and sustain Freeport Indonesia's large-scale copper production over the longer term.

13 hours ago

16 hours ago

Downstream Raw Material Inventory Ample, Intraday Trading Sluggish [SMM Secondary Copper Daily Review]

16 hours ago