SMM Copper Morning Briefing | Tue. Sep. 29, 2026

Overnight, both LME copper and SHFE copper closed lower, with both showing long liquidation. Rising oil prices intensified inflation concerns, compounded by hawkish expectations for the US Fed, and copper prices are expected to consolidate on a subdued note within a narrow range today.

1. Overnight Futures

LME copper:

Opened at $14,478/mt, hit a high of $14,481/mt, a low of $14,396/mt, and closed at $14,478/mt, down 1.05%. Trading volume was 19,000 lots, with open interest at 260,000 lots, down 2,650 lots from the previous trading day, indicating long liquidation.

The most-traded SHFE copper 2611 contract:

Opened at 109,260 yuan/mt, hit a high of 109,370 yuan/mt, a low of 108,970 yuan/mt, and closed at 109,260 yuan/mt, down 0.16%. Trading volume was 31,000 lots, with open interest at 184,000 lots, down 1,545 lots from the previous trading day, indicating long liquidation.

2. News

On Friday, September 25, Peru's mining minister said the country's copper production is expected to range between 2.5 million and 2.7 million mt this year. He added that Peru is expected to add 1 million mt of copper production annually within 5-6 years.

3. Spot Market

1) Shanghai

On September 28, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at a premium of 1,000-1,280 yuan/mt, with an average premium of 1,140 yuan/mt, down 175 yuan/mt from the previous trading day.

In early trading, the SHFE copper 2610 contract opened lower with a gap before bottoming out, and consolidated at lows overall. After the open, prices fell quickly to around 109,790 yuan/mt, then rebounded to around 110,070 yuan/mt. Copper prices subsequently retreated after multiple rapid rises, briefly touching a high of around 110,180 yuan/mt intraday, before the price center pulled back. Near midday, prices moved sideways in a narrow range around 109,950-110,000 yuan/mt, and the morning session closed at 109,970 yuan/mt.

The backwardation spread between the front and next month contracts was between 480-550 yuan/mt. The import profit margin for SHFE copper against the 2610 contract for the current month was between a loss of 1,700-1,600 yuan/mt.

Purchasing sentiment was 2.78, up 0.03 MoM; sales sentiment was 3.15, down 0.57 MoM.

SMM recorded social inventory in Shanghai at 51,200 mt, up 4,900 mt WoW from last Thursday, mainly due to the gradual arrival of some imported copper replenishing stocks. Social inventory in Jiangsu was recorded at 15,300 mt, down 2,900 mt WoW from last Thursday, mainly due to low arrivals, combined with normal cargo pick-up by some downstream processing enterprises.

Intraday market trading was generally sluggish. Although downstream processing enterprises still had sporadic pre-holiday stockpiling demand, purchasing enthusiasm was limited, with transactions mainly driven by rigid demand. Meanwhile, as imported supply gradually replenished in Shanghai, the tightness of available cargo in the market eased somewhat. Suppliers showed strong willingness to sell, and intraday quotes trended lower step by step.

High copper prices and the steep Back spread between futures contracts continued to dampen downstream procurement. Shanghai spot copper premiums are expected to remain under pressure tomorrow, with a high likelihood of edging down further.

2) Guangdong

On September 28, Guangdong #1 copper cathode spot against the front-month contract:

• High-quality copper was quoted at a premium of 1,200 yuan/mt, down 200 yuan/mt from the previous trading day;
• Standard-quality copper was quoted at a premium of 900 yuan/mt, down 200 yuan/mt from the previous trading day;
• SX-EW copper was quoted at a premium of 840 yuan/mt, down 200 yuan/mt from the previous trading day.

The average price of Guangdong #1 copper cathode was 111,085 yuan/mt, down 900 yuan/mt from the previous trading day; the average price of SX-EW copper was 110,875 yuan/mt, down 900 yuan/mt from the previous trading day.

Procurement sentiment stood at 2.56, down 0.05 from the previous trading day; selling sentiment stood at 2.76, up 0.03 from the previous trading day.

Overall, downstream restocking appetite was weak, forcing suppliers to lower prices to sell, and spot premiums fell notably.

3) Imported copper

September 28:

• The average warrant price was $117/mt, flat from the previous trading day, with a price range of $110-124/mt;
• The average B/L price was 112 yuan/mt, flat from the previous trading day, with a price range of 104-120 yuan/mt;
• The average price of EQ copper (CIF B/L) was $52/mt, flat from the previous trading day, with a price range of $44-60/mt.

Quotes were based on cargo arriving from September to mid-to-late October.

4) Secondary copper

At 11:30 on September 28, the futures closing price was 109,970 yuan/mt, down 770 yuan/mt from the previous trading day; the average spot premium was 1,140 yuan/mt, down 175 yuan/mt MoM from the previous trading day.

Secondary copper raw material prices fell 300 yuan/mt MoM; the selling sentiment index dropped to 2.57, while the procurement sentiment index rose to 2.03; the price difference between copper cathode and copper scrap was 3,926 yuan/mt, down 600 yuan/mt MoM; the price difference between copper cathode rod and secondary copper rod was 1,850 yuan/mt.

According to SMM survey, with the Mid-Autumn Festival holiday just over and the National Day long holiday approaching, many secondary copper rod enterprises were still seeking copper scrap supply. However, many copper scrap traders received limited arrivals during the Mid-Autumn Festival, leaving limited inventory available for sale before the National Day holiday.

Secondary copper rod enterprises had insufficient raw material stockpiles and temporarily arranged a 3-day holiday for workers; if raw material procurement remained insufficient over the remaining two trading days, secondary copper rod enterprises would extend the workers' holiday.

IV. Inventory

As of Monday, September 28, SMM nationwide mainstream copper inventories rose 3,500 mt WoW to above 70,000 mt, down 70,000 mt from above 140,000 mt in the same period last year.

V. Price Outlook

Macro:

The US rejected Iran's proposed peace agreement, which aimed to resolve the conflict between the two sides and reopen the Strait of Hormuz. The news pushed oil prices higher, reigniting market concerns over US inflation, while US Fed officials maintained a hawkish stance. The US dollar index closed higher, pressuring copper prices.

Fundamentals:

Supply side, arrivals of both domestic and imported cargoes increased, easing the tightness in spot circulation. Demand side, pre-holiday stockpiling has largely been completed, and combined with high premiums, downstream purchase willingness remained subdued.

Overall, copper prices are expected to consolidate on a subdued note today.

The information provided is for reference only and does not constitute direct investment research advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients are not related to SMM.