Escondida strike risk heats up, ore supply disruptions intensify [SMM Copper Morning Meeting Summary]

Thursday, September 24, 2026
Futures: Overnight, LME copper opened at $14,697.5/mt, shot up to $14,708/mt in early trading, then drifted lower to $14,563.5/mt near the end of the session, and finally settled at $14,615.5/mt, down 1.13%. Trading volume reached 19,700 lots, and open interest stood at 263,900 lots, down 137 lots from the previous trading day, reflecting long liquidation. Overnight, the most-traded SHFE copper 2610 contract opened at 110,790 yuan/mt, rose to 111,160 yuan/mt in early trading, then the price center moved straight down to a low of 110,560 yuan/mt, followed by wild swings before settling at 110,770 yuan/mt, down 0.5%. Trading volume reached 23,700 lots, and open interest stood at 123,500 lots, down 6,559 lots from the previous trading day, reflecting long liquidation.
[SMM Copper Morning Meeting Summary] News:
(1) According to mining.com citing Reuters: On Wednesday, September 23, the supervisors' union at BHP's Escondida copper mine in Chile said it will urge its members to reject the company's latest contract offer, paving the way for a strike at the world's largest copper mine. BHP made the offer at the end of formal negotiation talks on Tuesday, and union members will vote on it from September 28 to 30. Union president Alexis Barrera said the union board unanimously rejected the latest offer, calling it "lacking key elements." He called on union members to vote in favor of a strike. If members vote to reject the offer, a mandatory five-day government mediation process will begin before a legal strike can commence, which can be extended by another five days with the consent of both parties. Terms opposed by workers include task-based work requirements and a potential "14 days on, 14 days off" shift system under emergency conditions. Escondida management said the offer "contains improvements and new benefits over the current collective agreement, which is already a leading benchmark in the industry for supervisors and staff." The company said negotiations for the new contract were conducted against the backdrop of declining production, cost pressure, and investment plans to maintain future capacity.
Spot:
(1) Shanghai: On September 23, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at premiums of 1,200-1,480 yuan/mt, with an average premium of 1,340 yuan/mt, down 35 yuan/mt from the previous trading day. In early trading, the SHFE copper 2610 contract shot up and then fell sharply. After the open, prices rose quickly, touching a high near 111,760 yuan/mt, then consolidated at highs. Subsequently, copper prices fell rapidly, accelerating after breaking below 111,500 yuan/mt to around 110,880 yuan/mt. After a brief rebound from the low, prices pulled back again, consolidating on a weak note near midday, with the morning session closing at 110,930 yuan/mt. The Back month spread between the 2610 and 2611 contracts was 510-610 yuan/mt, and the import profit margin for SHFE copper against the 2609 contract was at a loss of 1,660-1,540 yuan/mt. During the day, the sales sentiment for copper cathode in Shanghai was 3.71, up 0.06 MoM, and the purchasing sentiment was 3.68, down 0.08 MoM. Historical data can be queried in the database. Looking ahead to today, available supply in Shanghai remains tight. Although some imported copper has arrived gradually during the day, the actual replenishment volume is relatively limited, and the pressure on spot premiums remains limited in the short term. However, as spot premiums stay high, downstream processing enterprises' acceptance of current prices continues to decline, wait-and-see sentiment in the market has intensified, and purchasing has gradually shifted to rigid demand. Meanwhile, with premiums at high levels, suppliers' willingness to sell has increased compared with earlier periods, and some warrants previously registered have begun to flow into the spot market, but the overall release volume remains limited. Overall, tight supply still provides some support for premiums, but negative feedback from the demand side on high premiums is gradually emerging. Spot premiums in Shanghai are expected to pull back today.
(2) Guangdong: On September 23, spot #1 copper cathode in Guangdong against the front-month contract: high-quality copper was quoted at a premium of 1,400 yuan/mt, up 100 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 1,100 yuan/mt, up 100 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 1,040 yuan/mt, up 100 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 112,615 yuan/mt, up 380 yuan/mt from the previous trading day, and the average price of SX-EW copper was 112,405 yuan/mt, up 380 yuan/mt from the previous trading day. The procurement sentiment for copper cathode in Guangdong stood at 2.69, down 0.02 from the previous trading day, while the selling sentiment stood at 2.71, up 0.06 from the previous trading day (historical data can be accessed via the database). Overall, premiums hit a record high, dampening downstream procurement appetite, and overall trading activity was weaker than the previous day.
(3) Imported copper: On September 23, the average warrant price was flat from the previous trading day at $117/mt (price range: $110-124/mt); the average B/L price was flat from the previous trading day at 112 yuan/mt (price range: 104-120 yuan/mt); the average price of EQ copper (CIF B/L) was flat from the previous trading day at $52/mt (price range: $44-60/mt), with quotes referencing cargoes arriving from September to mid-to-late October.
(4) Secondary copper: On September 23 at 11:30, the futures closing price was 110,930 yuan/mt, down 640 yuan/mt from the previous trading day. Spot premiums averaged 1,340 yuan/mt, down 35 yuan/mt MoM from the previous trading day. Secondary copper raw material prices fell 200 yuan/mt MoM today. The selling sentiment index for secondary copper raw materials was flat at 2.67, while the procurement sentiment index fell to 1.92. The price difference between copper cathode and copper scrap was 4,626 yuan/mt, up 555 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 2,210 yuan/mt. According to the SMM survey, copper prices retreated from highs, and secondary copper rod enterprises remained in no rush to procure. They are expected to begin stockpiling ahead of the long holiday only after prices fall below 110,000. However, secondary copper raw material traders generally complained that secondary copper raw material prices have recently tracked declines but not gains, leaving some high-priced inventory unsellable. Pre-holiday market trading sentiment remained subdued.
Prices: On the macro front, divisions emerged within Iran over engagement with the US, with Tasnim News Agency reporting that the foreign minister's contact with the US special envoy was unauthorized and a "mistake"; Rubio stated that the UN General Assembly talks made no breakthrough and negotiations still require time. Iran indicated it is in no rush to negotiate, said the opening of the Strait of Hormuz is contingent on its conditions being met, and warned neighboring countries not to comply with US restrictions on airlines; Tehran is evaluating the US response to its UN General Assembly proposal. The Iranian president stressed at the UN General Assembly that it will not accept threats from major powers, and the US delegation walked out midway. The preliminary US S&P Global Manufacturing PMI for September came in at 57, stronger than expected, with US Treasury yields strengthening and the US dollar moving higher, weighing on copper prices. Fundamentals side, available supply remained tight, with limited import replenishment. However, suppliers' willingness to sell increased, and some warrant cargoes flowed into the spot market. Overall supply remained tight but showed marginal easing. Demand side, high premiums suppressed downstream procurement, with wait-and-see sentiment intensifying. Procurement was mainly need-based, and overall demand remained weak. In summary, copper prices are expected to consolidate on a subdued note in a narrow range 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]