The premium renewed its intra-year high, copper prices drifted higher, and both closed up. [SMM Copper Morning Meeting Notes]

Tuesday, July 20, 2026
Futures: Overnight, LME copper opened at $13,604/mt, dipping to a session low of $13,590/mt amid wild swings in early trading. It then sustained wide fluctuations, climbing to $13,645/mt near the end of the session before finally settling at $13,644.5/mt, up 0.86%. Trading volume reached 15,600 lots, and open interest stood at 244,000 lots, a decrease of 1,039 lots from the previous trading day, with positioning dominated by bear closing. The most-traded SHFE copper 2609 contract opened at 104,490 yuan/mt overnight, dipped to a low of 104,240 yuan/mt at the start of the session, then drifted higher to touch 104,680 yuan/mt, afterward moving sideways. It eventually closed at 104,480 yuan/mt, up 0.69%. Trading volume was 33,800 lots and open interest stood at 192,000 lots, an increase of 1,706 lots from the previous trading day, with positioning led by bull building.
[SMM Copper Morning Brief] News:
(1) Data released by the China Customs online query platform showed that China's imports of copper ores and concentrates in June 2026 were 2,334,780.8 mt, down 1.10% MoM but up 0.03% YoY. Imports from Peru were 638,168.31 mt, down 7.77% MoM but up 22.05% YoY. Imports from Chile were 516,799.6 mt, down 27.35% MoM and down 23.29% YoY. On the export side, China's exports of copper ores and concentrates in June 2026 were 1.31 mt, down 99.95% MoM and down 96.64% YoY. Exports to the UK were 0.53 mt, up 2.51% MoM and up 3,692.86% YoY. Exports to the Netherlands were 0.33 mt, down 34.01% MoM but up 5,333.33% YoY.
Spot:
(1) Shanghai: On the morning of July 20, the SHFE copper 2608 contract showed a pattern of retreating after a rapid rise, stabilizing, and then surging again. It opened at 104,100 yuan/mt, rose rapidly to 104,300 yuan/mt, and then mainly traded between 104,130-104,280 yuan/mt. Prices then fell quickly, touching a session low of 103,910 yuan/mt. After small fluctuations, copper prices stabilized and began to rise, mainly trading between 104,140-104,260 yuan/mt, hitting a high of 104,350 yuan/mt intraday, and closing at 104,180 yuan/mt. The backwardation price spread between the front-month and next-month contracts was between 140-180 yuan/mt. The import profit margin for SHFE copper against the 2608 contract ranged from a loss of 230 yuan/mt to a loss of 160 yuan/mt. Looking ahead to today, SMM data recorded social inventory in the Shanghai region at 66,100 mt, down 10,400 mt WoW from last Thursday; the Jiangsu region recorded 19,600 mt, up 100 mt WoW from last Thursday. Currently, available spot supply remains tight, holding at a low level for the year, with the destocking trend unchanged. This has pushed the center of spot premiums higher continuously, refreshing a new high for the year. Meanwhile, the spot price spread between Shanghai and Guangdong widened further, opening a cross-regional arbitrage shipping window. SMM understands that some suppliers have already initiated cargo transfers from Guangdong to Shanghai, with the shipped copper cathode expected to arrive in the Shanghai market this week. If the arrivals are substantial, this could provide marginal relief to the current tight spot market. However, considering the limited volume of near-term arrivals and the still-low absolute inventory levels, the pressure on premiums is expected to be relatively limited. Overall, against the backdrop of a phase of sustained tight available supply, spot prices for SHFE copper against the 2608 contract are expected to maintain a premium today.
(2) Guangdong: On July 20, Guangdong #1 copper cathode spot against the front-month contract: high-quality copper was quoted at 170 yuan/mt, up 50 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 80 yuan/mt, up 30 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 20 yuan/mt, up 30 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 104,180 yuan/mt, up 350 yuan/mt from the previous trading day, and the average price of SX-EW copper was 104,075 yuan/mt, up 340 yuan/mt from the previous trading day. Overall, with both inventories and copper prices falling, suppliers actively held prices firm and sold, pushing premiums higher. As supply in Shanghai remains tight, Guangdong premiums are expected to continue drifting higher.
(3) Imported Copper: On July 20, the average warrant price rose $3/mt from the previous trading day to $103/mt (price range $98-108/mt); the average B/L price rose $2/mt to $102/mt (price range $96-108/mt); the average price of EQ copper (CIF B/L) was unchanged at $64/mt (price range $60-68/mt). Quotes referenced cargoes arriving from mid-to-late July to mid-to-late August.
(4) Secondary Copper: As of 11:30 on July 20, the futures closing price was 104,180 yuan/mt, up 330 yuan/mt from the previous trading day; the average spot premium was 435 yuan/mt, up 35 yuan/mt from the previous trading day. On July 20, copper scrap prices rose 300 yuan/mt from the previous trading day. The copper scrap sales sentiment index rose to 2.47, and the purchase sentiment index fell to 2.29. The price spread between copper cathode and copper scrap stood at 3,218 yuan/mt, up 29 yuan/mt from the previous trading day. The price spread between copper cathode rod and secondary copper rod was 1,410 yuan/mt. According to an SMM survey, with low inventories leading to high premiums, copper cathode spot prices remained elevated despite the off-season. End-user enterprises grew increasingly fearful of high prices, reducing their purchase willingness. This led to a further weakening of new orders for secondary copper rod enterprises during the off-season, naturally weakening demand for raw materials.
Prices: On the macro front, Iran stated that mediators proposed a 10-day ceasefire between the US and Iran to resume implementation of the memorandum of understanding, and that Iran had received the proposal and indicated it might negotiate with the US based on national interests. The Houthis announced a maritime ban against Saudi Arabia, while Saudi Arabia stated it was taking military action to secure shipping in the Bab el-Mandeb Strait. US media reported that Trump remained focused on making Iran “pay a price,” but negotiations between the two countries continued. Fundamentals side, supply side, China’s available spot resources remained tight, social inventory stayed at annual lows, inter-regional shipments and arrivals were limited, and the tight spot supply situation was difficult to ease in the short term; demand side, the industry was in the traditional consumption off-season, downstream enterprises purchased sporadically on demand, and overall consumption was weak. Inventory side, as of Monday July 20, SMM copper inventories in major Chinese regions fell by 32,700 mt from the previous Monday to 107,300 mt, with continued destocking providing bottom support for copper prices. Overall, with tight supply and destocking trends continuing, copper prices are expected to drift higher today.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions prudently and not use this as a substitute for their own independent judgment. Any decisions made by the client are unrelated to SMM]