Pre-delivery rollover demand weighs on premiums, copper prices consolidate at highs, downstream just-in-time procurement [SMM Copper Morning Brief]

2026.8.12 Wednesday
Futures: Overnight, LME copper opened at $14,208/mt, fluctuated and touched a high of $14,218/mt in the initial session, then drifted lower throughout the rest of the session, dipping to $14,142/mt near the close, and finally settled at $14,153/mt, up 0.23%. Trading volume reached 15,700 lots, and open interest stood at 261,000 lots, an increase of 2,675 lots from the previous trading day, indicating an increase in bear positions. The most-traded SHFE copper 2609 contract opened at 108,200 yuan/mt overnight. In the initial session, its price center edged up to 108,320 yuan/mt, then drifted lower to a low of 107,900 yuan/mt, and finally settled at 108,000 yuan/mt, up 0.04%. Trading volume reached 21,000 lots, and open interest stood at 213,000 lots, a decrease of 1,714 lots from the previous trading day, indicating a decrease in bear positions.
[SMM Copper Morning Meeting Summary] News:
(1) According to a report, Perpetua Resources announced on the 6th that it has delineated multiple gold-antimony exploration targets at the Stibnite project in Idaho, which could expand the permitted pit boundary, and also found tungsten mineralization clues. Tungsten is a critical mineral with the highest melting point and extremely high density among all metals, making it indispensable for heavy industry, aerospace engineering, advanced electronics, and weapons such as armor-piercing projectiles. The US stopped tungsten production in 2015. The US had been mining tungsten, but it became unprofitable due to low tungsten prices.
Spot:
(1) Shanghai: On the morning of August 11, the SHFE copper 2608 contract overall showed a retreat after a rapid rise and then rebounded. It opened at 108,220 yuan/mt, quickly rose and mainly traded between 108,500-108,650 yuan/mt, then edged down to 108,370 yuan/mt, stabilized and then rose again, touching a high of 108,730 yuan/mt during the session, and closed at 108,620 yuan/mt. The backwardation spread between the front-month and next-month contracts ranged between 300-360 yuan/mt, and the import profit margin for SHFE copper against the 2608 contract was at a loss of 1,720-1,560 yuan/mt. In the Shanghai region, electrolytic copper selling sentiment was 3.06, up 0.35 from the previous day, and purchasing sentiment was 2.73, up 0.16 from the previous day. Historical data can be found in the database. Looking ahead to today, as delivery approaches, the backwardation spread between the front-month and next-month contracts further widened to above 300-400 yuan/mt, raising the costs for suppliers to roll over positions and strengthening their willingness to sell spot cargoes, thus putting significant pressure on the premium against the front-month contract. Intraday selling and purchasing sentiment rebounded from yesterday, but with the price center of SHFE copper futures rising above 108,000 yuan/mt, downstream users still mainly made just-in-time procurement and had limited acceptance of high-priced offers. Meanwhile, some standard-quality copper had fallen to a discount of 10 yuan/mt to parity, the discount for non-registered copper further expanded, and low-priced cargoes continued to weigh on mainstream standard-quality copper offers. Overall, under the combined effect of the widening backwardation spread, strengthened supplier selling willingness near delivery, and high copper prices dampening consumption, the SHFE copper spot price center against the 2608 contract is expected to edge further down today, possibly turning to a discount.
(2) Guangdong: On August 11, Guangdong #1 copper cathode spot against the front-month contract: high-quality copper was at 100 yuan/mt, unchanged from the previous trading day; standard-quality copper was at a premium of 10 yuan/mt, up 10 yuan/mt from the previous trading day; SX-EW copper was at a discount of 50 yuan/mt, up 10 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 108,565 yuan/mt, up 620 yuan/mt from the previous trading day, and the average price of SX-EW copper was 108,460 yuan/mt, up 625 yuan/mt from the previous trading day. The purchase sentiment index for electrolytic copper in Guangdong was 2.31, down 0.04 from the previous trading day, while the selling sentiment index was 2.92, up 0.04 from the previous trading day (historical data can be queried from the database). Overall, the price spread between futures contracts widened sharply and copper prices continued to rise, leaving spot trades quiet.
(3) Imported copper: On August 11, the average warrant price fell $2/mt from the previous trading day to $99/mt (price range: $93-105/mt); the average B/L price fell $2/mt from the previous trading day to $95/mt (price range: $90-100/mt); the average price for EQ copper (CIF B/L) fell $2/mt from the previous trading day to $63/mt (price range: $58-68/mt). Quotations referenced cargoes arriving from August to early September.
(4) Secondary copper: On August 11, at 11:30, the futures closing price was 108,620 yuan/mt, up 850 yuan/mt from the previous trading day; the average spot premiums were 60 yuan/mt, down 20 yuan/mt from the previous trading day; secondary copper raw material prices remained flat from the previous trading day; the selling sentiment index for secondary copper raw materials rose to 2.77, while the purchase sentiment index fell to 1.86; the copper cathode-scrap price difference was 5,234 yuan/mt, up 830 yuan/mt from the previous trading day; the cathode rod-scrap rod price difference was 2,080 yuan/mt. According to SMM survey, copper prices shot up again, while scrap utilization enterprises have been continuously purchasing secondary copper raw materials from the market over the past two weeks, leading to ample raw material inventory. Given the current high copper prices, their purchase willingness was very weak.

Prices: On the macro front, Qatar stated that negotiations between Oman and Iran had entered an advanced stage, and Pakistan said the US and Iran were close to reaching an arrangement; Trump accused Iran of lacking sincerity and threatened military action, US helicopters fired on a cargo ship heading to Iran, Houthi forces struck Saudi-related targets in Yemen and expressed willingness to engage in dialogue with Saudi Arabia under certain conditions. The ongoing uncertainty in the Middle East continued to disturb the market, and copper prices maintained a consolidating trend. Fundamentals side, as delivery date approached, more shipments emerged on the supply side, easing spot availability marginally. However, high-quality copper and SX-EW copper remained tight, resulting in overall structural divergence. Demand side, the continuous surge in copper prices suppressed activity, with downstream users only making just-in-time procurement. Overall, copper prices are expected to consolidate in a narrow range on a subdued note 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 use this as a substitute for independent judgment. Any decisions made by clients are not related to SMM.]