China's physical demand recovers, Yangshan copper premiums rise to near four-year high [SMM Copper Morning Meeting Minutes]

Friday, September 18, 2026
Futures: Overnight LME copper opened at $14,378/mt, drifted higher after the open, touched a high of $14,513/mt, and finally closed at $14,464/mt, up 1.50%. Trading volume reached 21,000 lots, and open interest stood at 263,000 lots, an increase of 2,138 lots from the previous trading day, reflecting bullish positioning. Overnight, the most-traded SHFE copper 2610 contract opened at 109,200 yuan/mt, rose to a high of 109,850 yuan/mt during the session, then pulled back somewhat before finally closing at 109,650 yuan/mt, up 1.06%. Trading volume reached 34,000 lots, and open interest stood at 159,000 lots, a decrease of 776 lots from the previous trading day, reflecting bullish liquidation.
[SMM Copper Morning Meeting Summary] News:
(1) On Thursday, September 17, London copper futures rose, supported by an improved demand outlook and a softer US dollar. At 17:00 London time on September 17 (00:00 Beijing time on September 18), three-month LME copper rose $259, or 1.82%, to close at $14,491.5/mt. Since hitting a record high of $14,875/mt on September 10, copper prices have fallen 2.5%. The US Fed raised interest rates on Wednesday and signaled further hikes in the coming months. New Fed Chairman Warsh backed the unanimous decision, which effectively acknowledged that the Trump administration has so far failed to contain inflation, and policymakers worry it could worsen further. The latest quarterly economic projections showed that 16 of 18 policymakers expect at least one more 25-basis-point rate hike before the end of this year, while only two expect rates to remain unchanged. All but one policymaker saw upside risks to inflation and no longer viewed those risks as stemming primarily from one-off supply shocks. The US dollar rose after the Fed raised rates and reaffirmed its resolve to curb inflation, but pulled back later in the session as oil prices extended their decline. Marex senior base metals strategist Alastair Munro said Chinese buyers have returned, though volumes are not "massive." China is the world's largest copper consumer, and its strong physical demand is reflected in Yangshan copper premiums. The premium, a gauge of China's demand for imported copper, rose 2.5% on Thursday to $121/mt, the highest level in nearly four years. This strong demand is also reflected in domestic physical market premiums. Spot premiums over SHFE transaction prices rose to 645 yuan/mt on Wednesday, the highest since December 2023. Copper flowing to the US is also one reason LME warehouse inventories have declined since February last year, when US President Trump first talked about imposing tariffs on imported copper.
Spot:
(1) Shanghai: On September 17, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at premiums of 550-710 yuan/mt, with an average premium of 630 yuan/mt, down 15 yuan/mt from the previous trading day. In early trading, the SHFE copper 2609 contract opened lower with a gap and then continued to rise, with a slight correction during the session. The opening price was 107,640 yuan/mt. After the open, prices quickly declined to 107,480 yuan/mt, then rapidly rallied to around 108,100 yuan/mt before a slight correction, followed by another rapid rise. The intraday high reached 108,450 yuan/mt, and the closing price was 108,370 yuan/mt. The backwardation spread between adjacent months was 350-410 yuan/mt. The import profit margin for SHFE copper against the 2609 front-month contract ranged from a loss of 480 yuan/mt to a loss of 410 yuan/mt. During the day, the sales sentiment for copper cathode in Shanghai was 2.90, up 0.12 MoM, and the purchase sentiment was 2.92, up 0.27 MoM. Historical data can be queried in the database. Looking ahead to today, SMM recorded social inventory in Shanghai at 58,600 mt, down 2,500 mt WoW from Monday, while social inventory in Jiangsu was recorded at 20,800 mt, up 2,300 mt WoW from Monday. Overall social inventory saw a slight destocking. Supply-demand fundamentals: A large volume of imported copper is expected to arrive subsequently, which may put phased pressure on spot premiums. Downstream enterprises have low acceptance of the current high premiums, but due to tight availability of mainstream circulating cargoes in Shanghai, spot premiums for Shanghai copper cathode fell first and then rose during the day. In addition, according to SMM, some downstream processing enterprises have begun stockpiling for the Mid-Autumn Festival and National Day holidays, with purchase willingness edging up. Spot premiums for Shanghai copper cathode are expected to remain at current high levels today, with potential for a slight uptick.
(2) Guangdong: On September 17, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 700 yuan/mt, up 100 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 550 yuan/mt, up 70 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 490 yuan/mt, up 70 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 108,635 yuan/mt, up 820 yuan/mt from the previous trading day, and the average price of SX-EW copper was 108,500 yuan/mt, up 805 yuan/mt from the previous trading day. The purchase sentiment for copper cathode in Guangdong was 2.56, up 0.05 from the previous trading day, and the sales sentiment was 2.77, up 0.02 from the previous trading day (historical data can be queried by logging into the database). Overall, tight availability of circulating cargoes drove spot premiums higher, and market trading was slightly better than yesterday.
(3) Imported copper: On September 17, the average warrant price rose $3/mt from the previous trading day to $121/mt (price range: $112-130/mt); the average B/L price rose $1/mt from the previous trading day to $116/mt (price range: $112-120/mt); the average price of EQ copper (CIF B/L) fell $5/mt from the previous trading day to $65/mt (price range: $60-70/mt), with quotes referencing cargoes arriving from September to mid-October.
(4) Secondary copper: On September 17, at 11:30, the futures closing price was 108,370 yuan/mt, up 760 yuan/mt from the previous trading day. The average spot premium was 630 yuan/mt, down 15 yuan/mt WoW from the previous trading day. Today, secondary copper raw material prices rose 300 yuan/mt WoW. The secondary copper raw material sales sentiment index rose to 2.69, and the procurement sentiment index rose to 1.92. The price difference between copper cathode and copper scrap was 2,621 yuan/mt, up WoW. The price difference between copper cathode rod and secondary copper rod was 1,000 yuan/mt. According to the SMM survey, with the US Fed rate hike landed, market sentiment has been fully digested. Copper prices bottomed out. Secondary copper rod enterprises are currently urgently seeking tax-inclusive secondary copper raw material procurement, but with domestic secondary copper social inventory low and tax-inclusive supply already limited, secondary copper rod enterprises' procurement volume is extremely limited, resulting in low circulation in the secondary copper rod market.
Prices: On the macro front, expectations of easing tensions in the Middle East emerged, with Trump confirming he will meet with Gulf state leaders and the Iranian delegation granted permission to attend. Saudi Arabia reportedly found alternative routes for oil exports, and oil prices fell for two consecutive days. Meanwhile, China-US economic and trade teams are maintaining close communication on issues such as tariff reductions, boosting market risk appetite and driving copper prices higher. On the fundamentals side, although some imported copper is expected to arrive at ports in a concentrated manner later, actual supply growth remains limited in the short term, keeping the spot market tight. On the demand side, high copper prices have dampened downstream procurement, with the market still dominated by just-in-time procurement. As of Thursday, September 17, SMM copper inventories in major Chinese regions rose 1,600 mt WoW to 89,100 mt, down 44,600 mt from 133,700 mt in the same period last year. Overall, copper prices are expected to continue to edge up 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 not use this as a substitute for independent judgment. Any decisions made by clients are not related to Shanghai Metals Market.]