Pullback in Copper Prices Stimulates Downstream Restocking Demand Release, Warrant Outflow Dampens Spot Premiums [SMM Copper Morning Meeting Summary]

Thursday, August 20, 2026
Futures: Overnight, LME copper opened at $13,890.5/mt, dipped to $13,875/mt in early trading before its price center rose to touch $14,058/mt, and finally closed at $14,051.5/mt, up 0.64%. Trading volume reached 23,000 lots, and open interest stood at 261,000 lots, down 8,415 lots from the previous trading day, driven by bear position trimming. Overnight, the most-traded SHFE copper 2609 contract opened at 107,020 yuan/mt, hit a session high of 107,340 yuan/mt in early trading, then saw its price center pull back to bottom at 107,010 yuan/mt, and eventually moved sideways to close at 107,230 yuan/mt, up 0.23%. Trading volume reached 25,000 lots, and open interest stood at 171,000 lots, down 4,636 lots from the previous trading day, also driven by bear position trimming.
[SMM Copper Morning Briefing] News:
(1) On Wednesday, August 19, Canadian miner Lundin Mining lowered its 2026 copper production forecast after its operations in Chile's Atacama region were hit by a second severe winter storm. The snowstorm delayed the company's recovery from a previous weather-related power outage. The storm, which began on August 13, brought heavy rain to lower altitudes while causing unusually heavy snowfall and high winds at higher elevations.
Spot:
(1) Shanghai: On the morning of August 19, the SHFE copper 2609 contract showed a low-open, stabilizing and rebounding trend. It opened at 106,900 yuan/mt, continued to fall after the open, touched a low of 106,550 yuan/mt, then edged up after stabilizing to close at 106,900 yuan/mt. The backwardation spread between the current and next month was between 330 yuan/mt and 370 yuan/mt. The import profit margin for SHFE copper against the 2609 contract ranged from a loss of 570 yuan/mt to a loss of 510 yuan/mt. The sales sentiment for copper cathode in the Shanghai region was 3.33, up 0.28 WoW, and the purchase sentiment was 3.38, up 0.28 WoW. Historical data can be queried in the database. Looking ahead to today, the price center of the most-traded SHFE copper 2609 contract moved significantly lower from the previous trading day, driving the release of dip-buying demand downstream and causing a marked rebound in purchase sentiment in the Shanghai region. According to SMM, recent order performance improved notably WoW for some downstream enterprises, strengthening their purchase willingness for copper cathode and boosting market trading activity. However, some warrant cargoes gradually flowed into the spot market, increasing available spot supply. Suppliers lowered their quotes successively to facilitate deals, while downstream bargaining willingness was also notable, suppressing spot premiums. At the same time, available supply of high-quality copper remained scarce, and the widening backwardation spread provided some support to quotes for certain brands. Collectively, with the pullback in copper prices driving demand improvement but the inflow of warrant cargoes adding to spot supply, spot prices against the SHFE 2609 contract in Shanghai are expected to remain at a premium today.
(2) Guangdong: On August 19, Guangdong #1 copper cathode spot prices against the front-month contract were quoted at premiums of 80-160 yuan/mt, with an average premium of 120 yuan/mt, down 50 yuan/mt from the previous trading day; SX-EW copper was quoted at premiums of 0-20 yuan/mt, with an average premium of 10 yuan/mt, down 40 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 106,875 yuan/mt, down 1,040 yuan/mt from the previous trading day, and the average price of SX-EW copper was 106,765 yuan/mt, down 1,030 yuan/mt from the previous trading day. The purchase sentiment index for copper cathode in Guangdong stood at 2.39, up 0.10 from the previous trading day, while the shipment sentiment index was 2.95, up 0.02 from the previous trading day (historical data can be accessed in the database). Overall, suppliers proactively lowered prices to sell, and spot premiums continued to decline, with moderate overall trading.
(3) Imported copper: On August 19, the average warrant price was $87/mt, up $2/mt from the previous trading day (price range $79-95/mt); the average B/L price was $82/mt, up $2/mt from the previous trading day (price range $77-87/mt); the average price of EQ copper (CIF B/L basis) was flat at $53/mt from the previous trading day (price range $45-61/mt). Prices were based on cargoes arriving from August to early September.
(4) Secondary copper: On August 19, the futures closing price at 11:30 was 106,900 yuan/mt, down 790 yuan/mt from the previous trading day. The average spot premiums were 395 yuan/mt, down 20 yuan/mt from the previous trading day. Secondary copper raw material prices fell 500 yuan/mt from the previous trading day. The sales sentiment index for secondary copper raw materials fell to 2.66, while the purchase sentiment index rose to 1.91. The price spread between copper cathode and copper scrap was 4,188 yuan/mt, up 90 yuan/mt from the previous trading day. The price spread between copper cathode rod and secondary copper rod was 1,270 yuan/mt. According to an SMM survey, as copper prices declined for two consecutive days, secondary copper rod enterprises' purchase willingness increased notably. In some regions, reverse invoicing restrictions were relaxed, making enterprises' restocking willingness more evident. However, copper scrap traders were unwilling to sell at this time, generally holding back from selling, and transactions in the copper scrap market struggled to achieve larger volumes.
Prices: On the macro front, the US Treasury announced it will at least double the scale of its long-term Treasury bond buyback operations. The news pushed the US dollar lower, providing support for copper prices. However, LME inventories continued to rebound, still putting pressure on copper prices. On the fundamentals side, on the supply side, warrant cargoes flowed out, and available spot cargoes in the market were ample; on the demand side, the pullback in copper prices boosted downstream enterprises' restocking demand. 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 investment research advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decision made by clients has nothing to do with SMM.]