Early-Month Procurement Demand Release Supports Premium, Non-Registered Copper Arrivals Increase Inventory Buildup [SMM Copper Morning Meeting Summary]

Tuesday, August 4, 2026
Futures: Overnight, LME copper opened at $13,866/mt, briefly tested $13,884/mt in the early session before consolidating lower to a low of $13,808/mt, then rebounded toward the close to settle at $13,848/mt, up 0.33%. Trading volume was 16,900 lots and open interest fell to 248,000 lots, down 2,157 lots from the previous session, driven by bear liquidation. Overnight, the most-traded SHFE copper 2609 contract opened at 105,750 yuan/mt, reached a session high of 106,220 yuan/mt and a low of 105,610 yuan/mt, and eventually settled at 106,190 yuan/mt, up 0.07%. Trading volume was 26,800 lots and open interest dropped to 202,100 lots, down 3,851 lots from the previous session, driven by bear liquidation.
[SMM Copper Morning Brief] News:
(1) On Monday, August 3, Indonesia’s presidential office said the country had resumed exports of minerals that may contain rare earth elements as associated minerals, after weeks of uncertainty over a ban on shipments of rare earth elements. Mineral exports, including bauxite, alumina, copper cathode, and nickel derivatives, had faced delays due to a mandatory detection program for rare earth content. Presidential Chief of Staff Dudung Abdurachman told a press conference, “Exports of rare earth elements as primary products are indeed prohibited. However, this does not automatically apply to rare earth content that exists as an associated or by-product element in primary and derivative mineral products.”
Spot:
(1) Shanghai: On August 3, SMM #1 copper cathode was quoted at spot premiums of 230-330 yuan/mt against the current-month SHFE 2608 contract, with an average of 280 yuan/mt, up 20 yuan/mt from the previous day. The SHFE copper 2608 contract opened sharply higher in early trading and then traced a W-shaped pattern. It opened at 105,900 yuan/mt, quickly dipped to 105,670 yuan/mt, then rallied to 105,860 yuan/mt before slipping again to a session low of 105,680 yuan/mt, eventually stabilizing and steadily advancing to close at 105,830 yuan/mt. The backwardation spread between the spot and next month contracts ranged from 130 yuan/mt to 220 yuan/mt, and the import profit margin for SHFE copper against the 2608 contract stood between a loss of 540 yuan/mt and a loss of 440 yuan/mt. Shanghai copper cathode sales sentiment registered 3.00, up 0.18 MoM, and procurement sentiment was 2.84, up 0.12 MoM; historical data is available in the database. Looking ahead to today, the start of a new monthly procurement cycle saw some restocking demand from downstream and traders released, with intraday procurement sentiment improving from the prior session, providing some support to spot premiums. On inventory, SMM recorded Shanghai social inventory at 77,000 mt, up 7,500 mt WoW from last Thursday, mainly due to concentrated arrivals of a batch of non-registered copper; Jiangsu social inventory stood at 20,100 mt, down 1,100 mt WoW from last Thursday, reflecting that local consumption, although still generally weak, saw some just-in-time procurement. As the inflow of lower-priced non-registered copper entered the market, spot supply pressure increased somewhat, which could cap quotations for registered standard-quality copper. On balance, with procurement at the start of the month providing support but Shanghai inventory markedly higher and non-registered copper arrivals supplementing supply, SHFE spot copper premiums against the 2608 contract are expected to hold today, with the overall center likely consolidating around current levels and upside room being relatively limited.
(2) Guangdong: On August 3, spot Guangdong #1 copper cathode against the front-month contract: high-quality copper quoted at 100 yuan/mt, down 20 yuan/mt from the previous trading day; standard-quality copper quoted at a premium of 10 yuan/mt, down 30 yuan/mt from the previous trading day; SX-EW copper quoted at a discount of 50 yuan/mt, down 30 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 105,815 yuan/mt, up 25 yuan/mt from the previous trading day, and the average price of SX-EW copper was 105,695 yuan/mt, up 5 yuan/mt from the previous trading day. Overall, downstream demand remained weak at the beginning of the month, forcing suppliers to cut prices to sell, and overall trading was lackluster.
(3) Imported copper: On August 3, the average warrant price fell $1/mt from the previous trading day to $111/mt (price range $106-116/mt); the average B/L price fell $1/mt from the previous trading day to $106/mt (price range $102-110/mt); the average price of EQ copper (CIF B/L) fell $2/mt from the previous trading day to $72/mt (price range $68-76/mt), with quotes referencing August arrivals.
(4) Secondary copper: On August 3, the futures closing price at 11:30 was 105,830 yuan/mt, up 170 yuan/mt from the previous trading day, the average spot premium was 280 yuan/mt, up 20 yuan/mt WoW, secondary copper raw material prices rose 100 yuan/mt MoM on August 3, the secondary copper raw material sales sentiment index rose to 2.52, the purchase sentiment index rose to 2.01, and the price spread between copper cathode and copper scrap was 3,455 yuan/mt, down 1,068 yuan/mt WoW. The price difference between copper cathode rod and secondary copper rod was 1,630 yuan/mt. According to the SMM survey, copper prices climbed in the late session, and secondary copper raw material market transactions were very light throughout the day. Under high copper prices, tax-exclusive secondary copper raw material demand could still not be traded at scale due to policy issues, while tax-inclusive secondary copper raw material remained the "hot favorite" of the market. Scrap utilization enterprises indicated that Jiangxi region is expected to gradually relax restrictions on "reverse invoicing," and some enterprises have already resumed production.
Prices: On the macro front, US Fed's Williams expressed optimism that inflation will gradually ease, soothing market concerns over persistently high interest rates; geopolitically, Trump said US-Iran negotiations are still ongoing and the Strait of Hormuz may reopen on Tuesday, but Iran rejected the latest US proposal, leaving the progress of talks and the timing of the strait's reopening uncertain. Fundamentals-wise, supply side, recent arrivals of domestic copper and imported copper cathode edged up slightly, slightly easing the tightness of circulating supply; demand side, high copper prices continued to suppress production and purchase willingness among downstream enterprises, coupled with the traditional consumption off-season, downstream mainly restocked on a rigid demand basis, and overall purchasing sentiment was weak. As of Monday, August 3, SMM total copper inventories in major Chinese regions increased by 6,200 mt WoW to 118,900 mt, with total inventories up 17,000 mt compared to 135,900 mt in the same period last year, while regional performances diverged. Overall, copper prices are expected to consolidate and edge up today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions cautiously and not replace their independent judgment with this. Any decisions made by clients are unrelated to SMM.]