Supply pressure, rigid demand: Blister copper market supply-demand imbalance hard to reverse in the short term [SMM Analysis]

SMM News, September 7:

    In August 2026, the center of copper prices shifted up sharply, and the price difference between copper cathode and copper scrap widened accordingly. Under the traditional transmission logic, a wider price difference between copper cathode and copper scrap would drive secondary copper raw materials to flow in a more concentrated manner toward the smelting end, thereby boosting supply growth of secondary blister copper and copper anode. However, the transmission chain in reality was clearly impeded. China’s bill supervision was strictly enforced, and the divergence between tax-included and tax-excluded raw materials persisted: tax-excluded cargoes struggled to enter the compliant smelting system smoothly, while tax-included cargoes were relatively tight. The effective supply of copper scrap was constrained, and the incremental supply of copper anode in China was limited.

    Customs data showed that in July 2026, China imported 76,600 mt of copper anode (HS code: 74020000), up 4.83% MoM and down 9.07% YoY; cumulative imports from January to July totaled 481,500 mt, up 3.97% YoY on a cumulative basis. Over the same period, imports of copper ingot scrap (red/purple copper ingots, HS code: 74031900) were 34,500 mt, down 29% MoM and down 6% YoY; cumulative imports from January to July totaled 304,600 mt, up 16% YoY on a cumulative basis. Although copper anode import supply was supplemented during the year, the actual increase was limited.

    While the supply side was constrained, demand-side pressure also emerged. To cope with concentrated maintenance in Q4, smelters stockpiled in advance, with purchase willingness for raw materials clearly brought forward; marginal procurement demand was amplified, further exacerbating the supply-demand imbalance in the copper anode market.

    With both supply and demand tightening in the same direction, RCs continued to decline. SMM monthly data showed that in August 2026, the average blister copper RCs in south China were 750 yuan/mt, and 700 yuan/mt in north China, both falling to the lowest level of the year , directly reflecting the tightness of supply and demand in the spot market.

    Supply side, SMM expected the suppressing factors to continue into September:

    bill supervision remained strict. In September, China’s bill supervision environment was expected to remain stringent, and bill-related issues were still the biggest obstacle to the supply of secondary copper anode; the SHFE/LME price ratio was unfavorable, and port congestion delayed arrivals. In August, the futures-spot structure was unfavorable and the import profit margin was significantly negative; coupled with persistent congestion at domestic ports in China due to typhoon weather in late August, arrivals of imported copper scrap and copper anode may be delayed to some extent.

    Demand side, the supporting factors were also solid : spot copper concentrate TCs continued to hit new lows, smelter losses expanded, and procurement reliance on substitute raw materials such as blister copper/copper anode increased; moreover, as the period of concentrated smelter maintenance in Q4 approached, market stockpiling demand stayed high, and the procurement pace was unlikely to slow down significantly.

    Overall, supply-side constraints are unlikely to ease in the short term, while demand-side stockpiling purchases remain highly rigid, making a reversal in the short-term supply-demand pattern of the blister copper market unlikely. SMM expects the blister copper market to remain tight in September 2026, with the supply-demand imbalance persisting and upside room for RCs limited.