Tight supply and marginal demand improvement expected to drive copper prices higher [SMM Copper Morning Meeting Minutes]

Monday, September 21, 2026
Futures: Last Friday night, LME copper opened at $14,502/mt, drifted lower to touch $14,480.5/mt in early trading, then drifted higher to touch $14,551/mt near the close, and finally settled at $14,563/mt, up 0.62%. Trading volume reached 21,000 lots, and open interest reached 265,000 lots, up 2,021 lots from the previous trading day, driven by long-side additions. Last Friday night, the most-traded SHFE copper 2610 contract opened at 109,840 yuan/mt, edged up to touch 109,950 yuan/mt in early trading, then its center gradually shifted lower to 109,620 yuan/mt, and finally settled at 109,900 yuan/mt, up 0.34%. Trading volume reached 17,200 lots, and open interest reached 151,100 lots, down 766 lots from the previous trading day, driven by short-side reductions.
[SMM Copper Morning Briefing] News:
(1) On September 19 (Saturday), Sprott Asset Management said that despite copper prices hitting record highs, global mine copper production is likely to see its first decline in nearly a decade this year, affected by production disruptions, falling ore grades, and weak output in Chile. This also highlights the slow supply response of miners to higher prices.
Sprott's latest report showed that mine copper production fell 1.1% YoY in H1 2026. Production disruptions at Freeport-McMoRan's Grasberg copper mine in Indonesia and Ivanhoe Mines' Kamoa-Kakula copper complex in the DRC together reduced expected 2026 production by about 600,000 mt, accounting for roughly 2.5% of annual global mine copper output.
Jacob White, head of ETF product management at Sprott Asset Management, wrote in the report: "Higher prices can improve project economics, but they cannot compress the full project development cycle, nor can they quickly replenish exploration discoveries." He noted that copper mine projects take an average of about 17.5 years from discovery to production.
Supply-side constraints are compounded by growing copper demand from power grids, AI data centers, and national defense, while US tariff policies have driven massive volumes of copper cathode into US warehouses. Toronto-based Sprott data showed copper prices rose 47% in the 12 months through August.
Spot:
(1) Shanghai: On September 18, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at premiums of 660-810 yuan/mt, with an average premium of 735 yuan/mt, down 15 yuan/mt from the previous trading day. The SHFE copper 2610 contract shot up in early trading before consolidating lower. After the open, prices edged up, briefly rising to around 109,620 yuan/mt, then quickly pulled back to around 109,400 yuan/mt. Copper prices subsequently rebounded, but upward momentum was limited, and futures consolidated, with prices rebounding slightly multiple times before pulling back. Prices recovered modestly near midday, and the morning session closed at 109,500 yuan/mt. The Back month spread was between 360 yuan/mt and 400 yuan/mt, and the import profit margin for SHFE copper against the 2609 contract was between a loss of 1,000 yuan/mt and a loss of 410 yuan/mt. During the day, the sales sentiment for copper cathode in Shanghai was 3.31, up 0.41 MoM, and the procurement sentiment was 3.54, up 0.62 MoM. Historical data can be queried in the database. Looking ahead to this week, the tight supply-side pattern is expected to continue supporting spot premiums. According to SMM, from October to November, multiple domestic copper smelters will enter planned maintenance periods. Against the backdrop of persistently tight supply of copper concentrates and blister copper and copper anode, production and shipment pace at some smelters may be affected to some extent, with limited growth in available market supply. Meanwhile, port congestion in Shanghai has not fully eased, and the arrival pace of imported copper remains uncertain, making it difficult for short-term imported supply to see a significant increase. Demand side, with copper prices staying high, downstream procurement remains primarily need-based, with limited acceptance of high premiums. Overall, if arrivals do not increase significantly this week, spot premiums in the Shanghai market are expected to continue to consolidate at highs.
(2) Guangdong: On September 18, spot #1 copper cathode in Guangdong against the front-month contract: high-quality copper was quoted at a premium of 900 yuan/mt, up 200 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 700 yuan/mt, up 150 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 640 yuan/mt, up 150 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 110,255 yuan/mt, up 1,620 yuan/mt from the previous trading day, and the average price of SX-EW copper was 110,095 yuan/mt, up 1,595 yuan/mt from the previous trading day. The purchase sentiment for copper cathode in Guangdong was 2.61, up 0.05 from the previous trading day, while the selling sentiment was 2.70, down 0.07 from the previous trading day (historical data can be queried in the database). Overall, with inventories continuing to decline, suppliers actively held prices firm, driving premiums sharply higher.
(3) Imported copper: On September 18, the average warrant price rose $3/mt from the previous trading day to $124/mt (price range: $118-130/mt); the average B/L price was flat from the previous trading day at $116/mt (price range: $112-120/mt); the average price of EQ copper (CIF B/L) was flat from the previous trading day at $65/mt (price range: $60-70/mt), with quotes referencing cargoes arriving from September to mid-to-late October.
(4) Secondary copper: On September 18 at 11:30, the futures closing price was 109,500 yuan/mt, up 1,130 yuan/mt from the previous trading day. The average spot premium was 735 yuan/mt, up 105 yuan/mt MoM from the previous trading day. Copper scrap prices rose 800 yuan/mt MoM. The selling sentiment index for copper scrap rose to 2.71, while the purchase sentiment index fell to 1.91. The price difference between copper cathode and copper scrap was 2,936 yuan/mt, up 315 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,540 yuan/mt. According to SMM survey, as copper prices continued to recover, selling sentiment among copper scrap suppliers improved. However, with secondary copper rod prices forced to carry premiums due to high raw material costs, purchase willingness among end-user wire and cable enterprises remained very weak. With insufficient new orders for secondary copper rod, purchases of high-priced raw materials were limited.
Prices: On the macro front, Trump is open to meeting with the Iranian president at the UN General Assembly, while also saying he is considering thorough military action against Iran; Qatar said the US wants to reach a deal, and the Houthis agreed not to engage in war with the US. Trump will speak at the UN General Assembly on Tuesday, the Iranian president will speak on Wednesday, Netanyahu's visit to the US was unusually brief, and Turkey may provide defense assistance to Saudi Arabia. The pullback in crude oil eased inflation expectations, providing support for copper prices. On the fundamentals side, available supply remained tight, with suppliers holding prices firm and holding back from selling, keeping the overall supply situation tight. On the demand side, purchase sentiment rebounded sharply MoM, and downstream purchase willingness improved, but purchases remained primarily just-in-time, with limited acceptance of high premiums. Overall, copper prices are expected to drift higher 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 replacement for their own independent judgment. Any decisions made by clients have no relation to SMM.]