Wednesday, August 5, 2026
Futures: Overnight LME copper opened at $14,012/mt, dipped to $13,871.5/mt before rebounding, touched a high of $14,117/mt, and eventually closed at $14,043.5/mt, up 1.41%. Trading volume was 30,300 lots, and open interest rose to 251,000 lots, up 2,793 lots from the previous trading day, reflecting bullish position building. Overnight, the most-traded SHFE copper 2609 contract opened at 107,490 yuan/mt, reached a high of 107,500 yuan/mt and a low of 106,900 yuan/mt, and finally closed at 107,040 yuan/mt, up 0.37%. Trading volume was 46,500 lots, and open interest rose to 211,100 lots, up 1,601 lots from the previous day, reflecting bullish position building.
[SMM Copper Morning Report] News:
(1) According to a report on the website, Solstice Minerals' Nanadie copper-gold mine in Western Australia will host delegates of the Diggers & Dealers conference later this week. The company recently announced further drilling results from the Nanadie project, saying that these results indicate the potential for a further "substantial increase" in the Nanadie resource.
Spot:
(1) Shanghai: On August 4, SMM #1 copper cathode spot was quoted against the current 2608 contract at a premium of 230-330 yuan/mt, averaging a premium of 280 yuan/mt, up 20 yuan/mt from the previous trading day. In the morning, the SHFE 2608 copper contract moved in an overall uptrend, pulling back slightly after a rapid surge during the session. Opening at 106,200 yuan/mt, it continued to rise after the open, touching a high of 106,830 yuan/mt, then corrected slightly to 106,510 yuan/mt, before resuming its uptrend to close at 106,700 yuan/mt. The backwardation between the front-month and next-month contracts ranged from 100 yuan/mt to 170 yuan/mt, while the import profit margin for SHFE copper against the 2608 contract was at a loss of 840-730 yuan/mt. In Shanghai, the sales sentiment for copper cathode was 3.00, basically flat, while the purchasing sentiment was 2.91, up 0.04 from the previous day. Historical data can be accessed in the database. Looking ahead to today, the price center of SHFE copper has risen above 106,500 yuan/mt, notably suppressing downstream purchasing. Although it is still in the early-month purchasing cycle, with some downstream users having restocking needs for essential supplies and purchasing sentiment rebounding slightly from the previous trading day, actual procurement remains cautious, with transactions only occurring after suppliers continuously lowered their quotes. Meanwhile, low-priced non-registered copper traded around a premium of 50 yuan/mt, further widening its price spread against registered standard-quality copper, which also weighed on standard-quality copper quotes. The backwardation structure between the front-month and next-month contracts has narrowed from earlier levels, marginally weakening the basis for suppliers to hold prices firm. Overall, given the combined effect of high copper prices suppressing downstream purchasing, low-priced supply impacting the market, and increased willingness to sell from suppliers, it is expected that today's SHFE spot copper quotes against the 2608 contract will remain at a premium, though the overall center may edge slightly lower.
(2) Guangdong: On August 4, Guangdong #1 copper cathode spot against the front-month contract: high-quality copper quoted at a premium of 100 yuan/mt, flat from the previous trading day; standard-quality copper quoted at a premium of 0 yuan/mt, down 10 yuan/mt from the previous trading day; SX-EW copper quoted at a discount of 60 yuan/mt, down 10 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 106,545 yuan/mt, up 730 yuan/mt from the previous trading day, and the average price of SX-EW copper was 106,430 yuan/mt, up 735 yuan/mt from the previous trading day. The purchase sentiment index for copper cathode in Guangdong was 2.42, down 0.01 from the previous trading day, and the shipment sentiment index was 2.85, down 0.02 from the previous trading day (historical data can be accessed via the database). Overall, copper prices rose, downstream users were cautious in procurement, spot trades remained weak, and premiums merely held at the level of August 3.
(3) Imported copper: On August 4, the average warrant price fell $1/mt from the previous trading day to $110/mt (price range $106-114/mt); the average B/L price fell $1/mt from the previous trading day to $105/mt (price range $100-110/mt); the average price of EQ copper (CIF B/L basis) fell $1/mt from the previous trading day to $71/mt (price range $67-75/mt), with quotes referring to cargoes arriving in August.
(4) Secondary copper: On August 4, at 11:30, the futures closing price was 106,820 yuan/mt, up 990 yuan/mt from the previous trading day. The average spot premium was 230 yuan/mt, down 50 yuan/mt from the previous trading day. On August 4, copper scrap prices rose 200 yuan/mt from the previous trading day. The copper scrap sales sentiment index rose to 2.59, and the purchase sentiment index fell to 1.97. The price difference between copper cathode and copper scrap was 4,169 yuan/mt, up 714 yuan/mt from the previous trading day. The price difference between copper cathode rod and secondary copper rod was 1,870 yuan/mt. According to an SMM survey, the rising copper prices dampened the procurement sentiment of downstream scrap utilization enterprises. Although the control over “reverse invoicing” in some areas of Jiangxi has eased, only a few enterprises resumed production last week. As local governments and tax bureaus have not issued clear notices, most secondary copper rod enterprises did not dare to rashly resume production.
Prices: On the macro front, US Treasury Secretary Bessent stated that the US and Iran may reach an agreement on Wednesday Eastern Time, with the Strait of Hormuz expected to reopen in the near term. Iran’s negotiations with Oman also made positive progress, with Iran reportedly considering allowing Europe to participate in mine clearance in the strait. Accordingly, international oil prices pulled back significantly, curbing market expectations for multiple rate hikes by the US Fed this year, thus driving copper prices higher. However, cargo ships were still attacked in the Red Sea and the Strait of Hormuz, indicating that geopolitical risks had not fully subsided. On the fundamentals front, supply tightness eased further, as arrivals of both domestic and imported copper cathode increased recently. On the demand side, end-user orders remained weak during the traditional consumption off-season, and coupled with high copper prices, downstream users mainly restocked only as needed. Overall, copper prices are expected to consolidate and rise today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not replace their own independent judgment with this information. SMM is not responsible for any decisions made by clients.]
