Overnight LME Copper Edged Down, SHFE Copper Edged Up amid Escalating Middle East Tensions and Low Inventory Support [SMM Copper Morning Brief]

Monday, July 20, 2026
Futures: Last Friday evening, LME copper opened at $13,413/mt, and dipped to an intraday low of $13,382/mt at the start. The price center then drifted higher, and near the end of the session it rose to $13,533/mt, before finally closing at $13,528/mt, down 0.11%. Trading volume reached 19,600 lots, and open interest was 245,000 lots, up 3,041 lots from the previous trading day, reflecting increased bearish positioning. Last Friday evening, the most-traded SHFE copper 2609 contract opened at 103,100 yuan/mt, dipped to 103,000 yuan/mt at the start, then drifted higher to 103,990 yuan/mt near the end, and finally closed at 103,880 yuan/mt, up 0.15%. Trading volume was 31,000 lots, and open interest reached 184,000 lots, up 3,839 lots from the previous trading day, reflecting increased bullish positioning.
[SMM Copper Morning Express] News:
(1) According to , gold prices fell back below $4,000/oz, and most of the gains in the mining sector in 2026 have been erased, but diversified veteran giants led by BHP are returning. At the end of Q2, the world's 50 largest mining companies by market cap, as ranked by , totaled approximately $2.19 trillion, down $228 billion QoQ, with a year-to-date increase of only $22 billion. In Q1, the outbreak of the US-Iran war pushed the total market cap of the top 50 miners to $2.41 trillion, but nearly all of those gains were wiped out in Q2.
Spot:
(1) Shanghai: On July 17, in the early morning session, the SHFE copper 2608 contract declined, then stabilized and rebounded. It opened at 103,920 yuan/mt, continued to weaken and dip to an intraday low of 103,390 yuan/mt, and then stabilized and rose to close at 103,710 yuan/mt. The inter-month backwardation spread ranged from 120 to 180 yuan/mt, and spot import profit margins against the SHFE 2608 contract were between a loss of 250 yuan/mt and a loss of 190 yuan/mt. Looking ahead to today, available spot supply remains tight at its lowest level of the year, and the destocking trend persists. Combined with the widening backwardation structure, suppliers have been continuously raising their quotes, showing a strong willingness to hold prices firm. Overall, with tight available supply, suppliers holding prices firm, and downstream just-in-time procurement, Shanghai spot copper against the SHFE 2608 contract is expected to maintain a premium today, with the overall premium center continuing to rise.
(2) Guangdong: On July 17, #1 copper cathode spot in Guangdong against the front-month contract: high-quality copper was quoted at a premium of 120 yuan/mt, down 60 yuan/mt from the previous trading day; standard-quality copper at a premium of 50 yuan/mt, down 50 yuan/mt; SX-EW copper at a discount of 10 yuan/mt, down 50 yuan/mt. The average price of #1 copper cathode in Guangdong was 103,830 yuan/mt, down 350 yuan/mt from the previous trading day, and the average price of SX-EW copper was 103,735 yuan/mt, down 345 yuan/mt. Overall, as arrivals increased, suppliers proactively cut prices to sell, and spot trades were active.
(3) Imported Copper: On July 17, the average warrant price rose $5/mt from the previous trading day to $100/mt (price range $95-105/mt); the average B/L price rose $5/mt from the previous trading day to $100/mt (price range $95-105/mt); the average price for EQ copper (CIF B/L) rose $4/mt from the previous trading day to $64/mt (price range $60-68/mt). Quotations were based on cargoes arriving from mid-to-late July to mid-to-late August.
(4) Secondary Copper: On July 17, the futures closing price at 11:30 was 103,850 yuan/mt, down 600 yuan/mt from the previous trading day. Average spot premiums stood at 400 yuan/mt, up 50 yuan/mt from the previous trading day. On July 17, copper scrap prices fell 300 yuan/mt from the previous trading day. The sales sentiment index for copper scrap dropped to 2.41, while the purchasing sentiment index rose to 2.34. The price difference between copper cathode and copper scrap was 3,189 yuan/mt, down 224 yuan/mt from the previous trading day. The price difference between copper cathode rod and secondary copper rod was 1,240 yuan/mt. According to SMM survey, the pullback in copper prices suppressed suppliers' selling sentiment for copper scrap. However, with the cathode-scrap price spread still above 3,000 yuan/mt, downstream secondary copper rod enterprises, attracted by futures arbitrage opportunities, continued to actively purchase copper scrap, keeping purchasing sentiment for copper scrap elevated during the day.
Prices: On the macro front, Iran suspended its compliance with the Iran-U.S. memorandum of understanding, and Trump responded that he “doesn’t care at all”; Iran then warned that if U.S. forces continued operations it would shift to a full-scale offensive, and had already used drones and missiles to strike U.S. targets in Kuwait, Bahrain and Jordan. The U.S. confirmed two soldiers killed and one missing. Facing escalating conflict, the U.S. rushed to deploy more warplanes to the Middle East and warned Gulf states, while Iran claimed traffic through the Strait of Hormuz had dropped to zero and threatened to target facilities including Dubai and Abu Dhabi airports. Heightened Middle East tensions weighed on copper prices. On the fundamentals side, supply-side spot availability remained tight with inventories at their lowest for the year, keeping the overall balance tight; demand-side, the off-season curbed downstream procurement, leaving demand subdued. Overall, copper prices are expected to drift higher today.
[The information provided is for reference only. It does not constitute a direct recommendation for investment or research decisions. Clients should make decisions prudently and not treat this as a substitute for their own independent judgment. Any decisions made by clients have no connection with SMM.]