Bears reduce positions coupled with bulls increase positions, copper prices are expected to drift higher with small fluctuations [SMM Copper Morning Meeting Minutes]

Wednesday, August 26, 2026
Futures: Overnight, LME copper opened at $14,292.5/mt, then drifted lower to a low of $14,235/mt, before rebounding to a high of $14,384/mt, and finally closed at $14,324.5/mt, up 0.56%, with trading volume of 19,000 lots and open interest of 264,000 lots, a decrease of 1,743 lots from the previous trading day, reflecting bearish reduction. Overnight, the most-traded SHFE copper contract 2610 opened at 108,300 yuan/mt, hit a high of 109,030 yuan/mt during the session, and a low of 107,880 yuan/mt, finally closing at 108,700 yuan/mt, up 0.67%, with trading volume of 45,000 lots and open interest of 210,000 lots, an increase of 5,925 lots from the previous trading day, reflecting bullish accumulation.
[SMM Copper Morning Meeting] News:
(1) On Tuesday, August 25, South32 released an updated ore reserve and mineral resource estimate (MRE) for the Sierra Gorda copper mine in Chile. The company stated that this update was driven by the success of an infill drilling program, which improved geological understanding of the ore body. Between 2023 and 2025, the project completed 200 drill holes totaling approximately 85,000 meters. As of the latest assessment on July 31, 2026: ore reserves increased by 61% to 1.1 billion mt, with average total copper grade of 0.39%, total molybdenum grade of 0.016%, gold grade of 0.06 g/mt, and copper equivalent grade of 0.46%. The initial reserve life of the mine was extended by approximately five years, extending the mine life to 2045. Mineral resources (MRE) stood at 1.87 billion mt, with average total copper grade of 0.37%, total molybdenum grade of 0.016%, gold grade of 0.06 g/mt, and copper equivalent grade of 0.44%. Sierra Gorda is a large-scale conventional open-pit copper mine located in the Antofagasta Region of northern Chile, with modern processing facilities on site. The copper concentrates produced at the mine are transported by truck and rail to the ports of Antofagasta and Angamos for export to international markets. South32 CEO Matt Daley said in a press release: "This update highlights the scale, quality, and long life of the Sierra Gorda ore body, and we expect the mine to be a significant source of copper supply for decades to come." Daley stated: "This update follows the approval in July to progress the Sierra Gorda fourth mill line project, which is expected to increase copper production by approximately 30% from 2031." "Given that the ore body remains open at depth, the mine has the potential for further growth on top of the current increase in ore reserves and mine life. We continue to work with our joint venture partner to drive the ongoing development and value of the Sierra Gorda project." The company said Sierra Gorda also includes the Catabela Northeast exploration project, where drilling has encountered significant copper mineralization, highlighting the potential to further extend mine life. South32 acquired a 45% interest in Sierra Gorda in February 2022 and jointly controls the mine with joint venture partner KGHM Polska Mied, which holds a 55% interest.
Spot:
(1) Shanghai: On August 25, SMM #1 copper cathode spot prices against the SHFE copper 2609 contract were quoted at a premium of 180 yuan/mt to 320 yuan/mt, with an average premium of 250 yuan/mt, up 40 yuan/mt from the previous trading day. The SHFE copper 2609 contract retreated after a rapid rise overall. Prices shot up after the market opened, with the intraday high approaching 108,550 yuan/mt, before quickly pulling back. Thereafter, the price center consolidated lower and gradually moved below the average price line. Near noon, it once dipped to around 108,050 yuan/mt, before finally edging up to 108,120 yuan/mt. The inter-month backwardation spread ranged from 160 yuan/mt to 250 yuan/mt. The import profit margin for SHFE copper against the 2609 contract for the current month ranged from a loss of 1,370 yuan/mt to a loss of 1,280 yuan/mt. During the day, sales sentiment for copper cathode in the Shanghai region was 2.94, down 0.12 MoM, and purchase sentiment was 3.25, up 0.27 MoM. Historical data can be queried from the database. Looking ahead to today, the Shanghai copper cathode spot market is expected to trade actively during the day, with purchase sentiment rebounding notably. According to SMM, available spot cargoes in the market are relatively tight. After the second time period, low-price cargoes quickly decreased, and suppliers raised their quotes accordingly. On the one hand, recent port congestion has affected the docking and warehouse entry pace of some imported copper, limiting the supplement of imported cargoes to the domestic spot market. On the other hand, with the copper export window opening, some market participants’ willingness to export has increased, also diverting some available domestic cargoes. Furthermore, rapid inventory destocking has further strengthened expectations of tight spot supply. Against this background, suppliers have a strong willingness to hold prices firm and hold back from selling, while downstream players and traders still have restocking needs. It is expected that today, spot prices against the SHFE copper 2609 contract will maintain a premium, with the overall center likely edging up. The absolute level of copper prices remains high. If the premium continues to rise rapidly, downstream purchase willingness may be somewhat suppressed, and the premium is expected to rise to a relatively limited extent.
(2) Guangdong: On August 25, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 250 yuan/mt, up 100 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 150 yuan/mt, up 70 yuan/mt; SX-EW copper was quoted at a premium of 90 yuan/mt, up 80 yuan/mt. The average price of #1 copper cathode in Guangdong was 108,505 yuan/mt, up 665 yuan/mt from the previous trading day; the average price of SX-EW copper was 108,395 yuan/mt, up 660 yuan/mt. Purchase sentiment for copper cathode in the Guangdong region was 2.89, up 0.07 from the previous trading day, and shipment sentiment was 2.88, down 0.11 from the previous trading day (historical data can be queried by logging into the database). Overall, available spot cargoes in the market decreased, and suppliers actively held prices firm, stimulating a higher premium, leading to improved transactions overall.
(3) Imported copper: On August 25, the average warrant price fell $2/mt from the previous trading day to $88/mt (price range $83-93/mt); the average B/L price fell $2/mt from the previous trading day to $85/mt (price range $80-90/mt); the average EQ copper (CIF B/L) price fell $2/mt from the previous trading day to $38/mt (price range $30-46/mt), with quotes referencing cargo arriving from August to mid-September.
(4) Secondary copper: On August 25 at 11:30, the futures closing price was 108,120 yuan/mt, up 360 yuan/mt from the previous trading day; the average spot premium was 250 yuan/mt, up 40 yuan/mt MoM from the previous trading day; on August 25, the price of copper scrap rose 200 yuan/mt MoM; the copper scrap sales sentiment index rose to 2.78, while the purchasing sentiment index fell to 1.77; the price difference between copper cathode and copper scrap stood at 4,020 yuan/mt, up 174 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,250 yuan/mt. According to an SMM survey, with the center of copper prices shifting higher, many scrap utilization enterprises are mostly waiting and watching. The recent volatile trend in the copper market has split downstream enterprise quotations into two camps: those rushing to purchase at high prices and those pushing for lower prices to pick bargains. Scrap utilization enterprises have not yet clearly felt the downstream stocking demand that comes with the peak season, so the copper scrap market saw tepid trading.
Price: On the macro front, the market weighed the US expansion of sanctions on Iran and new measures to ease pressure on long-term Treasury yields. The US dollar index first rose and then fell, and copper prices were influenced by this, initially falling then rising. Regarding geopolitical conflicts, there were reports that the US and Iran had reached a consensus on the terms of a ceasefire agreement, but Iran stated that the Strait of Hormuz would not be immediately reopened, leaving uncertainty in the geopolitical situation. On the fundamentals side, on the supply side, due to recent port congestion, the arrival and warehousing pace of some imported copper has slowed down, limiting replenishment from imported sources. On the demand side, high copper prices continue to suppress downstream consumption, with procurement remaining mainly driven by rigid demand. In summary, copper prices are expected to drift higher with small fluctuations today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and not replace their own independent judgment with this. Any decisions made by clients are unrelated to SMM.]