Tight available supply drives premiums sharply higher; caution needed over weakening downstream acceptance amid high prices and high backwardation [SMM Shanghai Spot Copper]

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, available supply in the Shanghai region is expected to remain tight. Coupled with the persistent pre-holiday stockpiling demand from some downstream processing enterprises, this continues to provide strong support for spot premiums. Although some imported copper locked in at favorable SHFE/LME price ratios after the import window opened earlier is gradually arriving, the overall volume is limited. The supplementary effect on market supply is expected to be relatively modest in the short term, making it difficult to significantly ease the current supply tightness. As a result, spot premiums are expected to have further room to rise tomorrow. However, copper prices are already at elevated levels, and the backwardation spread between futures contracts has widened simultaneously. Combined with the rapid climb in spot premiums, procurement costs for downstream and end-user enterprises have increased markedly, and their acceptance of high premiums may gradually decline. If premiums continue to rise rapidly, some downstream buyers may turn to a wait-and-see stance, reducing just-in-time procurement, and market trading activity may pull back. Market participants are advised to monitor the risk of negative feedback on the demand side amid the combined effects of high copper prices, deep backwardation, and elevated premiums.

SMM Analysis: According to data from the General Administration of Customs, China imported 210,200 mt of copper cathode in August 2026, down 14.24% MoM and down 20.48% YoY...

Capstone Copper Corp. (TSX: CS; ASX: CSC) agreed on 21 September 2026 to sell its Cozamin copper-silver-zinc-lead underground mine in Zacatecas, Mexico, to Luca Mining Corp. (TSXV: LUCA) for total consideration of up to US$385 million. The package comprises US$275 million upfront cash, US$15 million in Luca shares, US$35 million deferred to the first anniversary, and up to US$60 million in contingent cash tied to annual average copper prices. Cozamin is forecast to average 20,000 tonnes of copper and 1.3 million ounces of silver annually between 2023 and 2030 at C1 costs of about US$1.51 per payable pound. Closing is targeted for the fourth quarter of 2026, requires no shareholder vote, and strengthens Capstone's balance sheet for growth projects in Chile and the United States.