Monday, August 3, 2026
Market: Last Friday night, LME copper opened at $13,819.5/mt, hit a high of $13,883/mt, then came under pressure and fell back to test $13,729.5/mt, pared some losses at the close, and finally settled at $13,803/mt, up 0.03%; trading volume was 16,800 lots, and open interest increased to 250,200 lots, up 3,988 lots from the previous trading day, reflecting increased long positions. Last Friday night, the most-traded SHFE copper 2609 contract opened at 105,460 yuan/mt, hit a high of 105,780 yuan/mt, then drifted lower to test 105,140 yuan/mt, and finally settled at 105,360 yuan/mt, down 0.09%; trading volume was 30,300 lots, and open interest fell to 199,000 lots, down 2,612 lots from the previous trading day, reflecting reduced long positions. On the macro front, Fed Chairman Warsh considered reducing the frequency of annual interest rate meetings, while several Fed officials released hawkish signals, leading to a slight increase in market expectations for rate hikes. Expectations of easing tensions in the Middle East emerged, with Trump stating he had agreed to cancel strikes on Iran, and US-Iran talks set to begin on the morning of August 4 Beijing time. However, Iranian military and media denied the cessation of attacks and the reopening of the Strait of Hormuz, with divergent statements from various parties; geopolitical uncertainties had not fully dissipated.
[SMM Copper Morning Report] News: (1) On August 1, the US State Department issued a broad security alert to US citizens in the Middle East, advising them to consider leaving or be prepared to leave quickly. According to US sources, the US and Israel were planning the "fiercest bombing yet" targeting Iran's energy facilities, an operation that could last the entire weekend. However, President Trump had not yet given the final order. On the same day, Iran's Foreign Ministry issued a statement stressing its determination to continue resistance.
(2) On August 1, the People's Bank of China held its H2 2026 work conference. Guided by the Thought on Socialism with Chinese Characteristics for a New Era, the conference thoroughly implemented the decisions and deployments of the CPC Central Committee and the State Council, reviewed the work since the start of 2026, analyzed the current situation, and arranged tasks for the next phase.
Spot: (1) Shanghai: On July 31, spot #1 copper cathode against the current-month 2608 contract was quoted at premiums of 210-310 yuan/mt, with an average of 260 yuan/mt, down 5 yuan/mt from the previous trading day. Looking ahead to this week, with the start of a new procurement cycle at the beginning of the month, some restocking demand from downstream and traders may emerge, providing some support for spot premiums. Last Friday, as low-priced cargo was gradually traded, suppliers' willingness to hold prices firm strengthened notably; standard-quality copper with this month's VAT invoices was mostly quoted at premiums of 200 yuan/mt and above, with limited willingness to sell at significantly lower prices. However, copper prices remained high, and actual downstream purchasing volumes still need to be watched; the gradual arrival of imported copper could also supplement spot supply. Overall, supported by the release of beginning-of-month procurement demand and suppliers' firm pricing, this week's Shanghai spot copper against the 2608 contract is expected to remain at premiums, with the overall center likely to stop falling and rebound. Attention should be paid to import arrivals and their actual supplement to market available supply.
(2) Guangdong: On July 31, Guangdong #1 copper cathode spot against the current-month contract: high-quality copper was reported at 120 yuan/mt, down 30 yuan/mt from the previous trading day; standard-quality copper was at a premium of 40 yuan/mt, down 40 yuan/mt; SX-EW copper was at a discount of 20 yuan/mt, down 40 yuan/mt. Overall, at month-end, downstream consumption was sluggish, and suppliers had to lower prices to sell, leading to a significant decline in spot premiums.
(3) Imported copper: On July 31, the average warrant price was flat from the previous trading day, at $112/mt (range $108-116/mt); the average B/L price was flat at $107/mt (range $104-110/mt); the average EQ copper (CIF B/L) price fell $1/mt from the previous trading day to $74/mt (range $70-78/mt), quoting for cargoes arriving in August. Today, the SHFE/LME price ratio weakened somewhat, and the backwardation structure of nearby contracts widened. With expectations of tight market available supply easing, downstream buying interest remained sluggish, and premiums lacked further upward momentum.
(4) Secondary copper: On July 31, at 11:30, futures closing price was 105,660 yuan/mt, up 620 yuan/mt from the previous trading day, and spot premium averaged 260 yuan/mt, down 5 yuan/mt from the previous trading day on a MoM basis. Today, copper scrap prices rose 200 yuan/mt MoM. The copper scrap sales sentiment index rose to 2.48, and the purchase sentiment index fell to 1.98. The price difference between copper cathode and copper scrap was 4,523 yuan/mt, up 391 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,440 yuan/mt. According to SMM survey, at the end of the week, copper prices rose, and copper scrap suppliers sold into strength. However, due to policy suspension in Jiangsu, secondary copper rod enterprises halted production and adopted a wait-and-see approach, leading to further decline in demand for tax-exclusive copper scrap. Meanwhile, tax-inclusive supply remained tight, with the invoice tax rate for copper scrap with 13% VAT rising to 11-12% in some regions.
Prices: On the fundamental side, supply – arrivals of domestic copper and imported cargo have increased slightly recently, with imported materials such as Peruvian large plate, ESOX, and Myanmar copper circulating in the market, supplementing the previously tight spot supply. Demand – the traditional consumption off-season, combined with high copper prices, continued to suppress downstream purchase willingness, and enterprises mainly made just-in-time procurement. Overall, copper prices are expected to fluctuate upward today.
[Data source statement: All data other than public information are processed by SMM based on public information, market communication, and SMM's internal database models. They are for reference only and do not constitute decision-making advice.]
