SMM Copper Morning Briefing | Monday, October 12, 2026

SMM, October 12: Overnight, LME copper closed up 1.79%, driven by bear position reduction; SHFE copper closed up 0.84%, also driven by bear position reduction. On the macro front, easing tensions in the Middle East and supply disruptions at mines supported copper prices, but uncertainties remain, including weakening US consumer confidence and rising inflation expectations. Copper prices are expected to consolidate on a strong note today.

1. Overnight Futures

LME copper: Opened at $14,488.5/mt, hit a high of $14,583/mt, a low of $14,470/mt, and closed at $14,550/mt, up 1.79%. Trading volume was 17,000 lots, with open interest at 260,000 lots, down 1,582 lots from the previous trading day, driven by bear position reduction.

Most-traded SHFE copper 2611 contract: Opened at 110,300 yuan/mt, hit a high of 110,850 yuan/mt, a low of 110,190 yuan/mt, and closed at 110,530 yuan/mt, up 0.84%. Trading volume was 21,600 lots, with open interest at 191,000 lots, down 1,190 lots from the previous trading day, driven by bear position reduction.

2. News

(1) The naval force of Iran's Islamic Revolutionary Guard Corps stated on the 11th that a "violating" supertanker struck a mine and caught fire in waters south of the Strait of Hormuz. The IRGC Navy also announced that all vessels that shut down their navigation and identification systems in the Strait of Hormuz will be regarded as "hostile targets" and will face severe and decisive action.

(2) The Ministry of Finance released the report on the implementation of China's fiscal policy in H1 2026. The Ministry of Finance will promptly formulate practical and effective incremental policies based on macroeconomic conditions, strengthen counter-cyclical adjustments, boost domestic demand, optimize supply, effectively safeguard and improve people's livelihoods, and promote sustained, high-quality economic development, providing a solid guarantee for a good start to the 15th Five-Year Plan period.

3. Spot Market

1) Shanghai

Selling sentiment for copper cathode was 3.38, up 0.53 MoM, while purchasing sentiment was 2.92, up 0.14 MoM.

On October 9, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at premiums of 380–700 yuan/mt, with an average premium of 540 yuan/mt, down 170 yuan/mt from the previous trading day. Looking ahead to this week, the Back spread between adjacent months widened significantly, and suppliers' willingness to sell increased notably. Last Friday, suppliers repeatedly lowered quotes to facilitate transactions. Supply side, some imported copper is expected to arrive gradually this week, and available market supply may increase. Meanwhile, as the delivery date approaches, near-month contracts remain well supported, and the Back spread between adjacent months is expected to stay at a relatively high level, with the possibility of further widening in stages, continuing to pressure spot premiums. Demand side, with current high copper prices, high backwardation in monthly spreads, and spot prices still in premiums, some downstream processing enterprises remained cautious in their purchase willingness, with a strong wait-and-see sentiment in the market. Some buyers preferred to wait for spot premiums to pull back further before purchasing.

2) Guangdong

The purchase sentiment index was 2.72, up 0.1 from the previous trading day, while the sales sentiment index was 2.96, up 0.05 from the previous trading day.

On October 9, Guangdong #1 copper cathode spot prices against the front-month contract:

High-quality copper was quoted at a premium of 600 yuan/mt, up 300 yuan/mt from the previous trading day;

Standard-quality copper was quoted at a premium of 300 yuan/mt, up 200 yuan/mt from the previous trading day;

SX-EW copper was quoted at a premium of 240 yuan/mt, up 200 yuan/mt from the previous trading day.

Guangdong inventory fell again, mainly due to reduced arrivals and increased warehouse withdrawals. As downstream copper processing enterprises resumed production, demand increased, and suppliers actively held prices firm while selling. However, the excessively wide monthly spread suppressed transactions among traders. Overall, recovering consumption and falling inventory drove spot premiums higher, but the wide monthly spread suppressed trading, with overall trading activity only slightly better than yesterday.

3) Imported copper

October 9: Average warrant price was $135/mt, up $10/mt from the previous trading day, with a price range of $120-150/mt; average B/L price was $130/mt, up $10/mt from the previous trading day, with a price range of $120-140/mt; average EQ copper (CIF B/L) price was $62/mt, up $7/mt from the previous trading day, with a price range of $54-70/mt.

Quotes were based on cargoes arriving in October. After the holiday, available spot imported copper supply remained tight, while downstream demand was rigid. As the SHFE/LME price ratio recovered today, inquiries increased, and spot premiums continued to shoot up.

4) Secondary copper

At 11:30 on October 9, futures closing price was 110,910 yuan/mt, down 800 yuan/mt from the previous trading day; average spot premiums were 540 yuan/mt, down 170 yuan/mt MoM from the previous trading day.

Copper scrap prices fell 300 yuan/mt MoM; the sales sentiment index fell to 2.51, while the purchase sentiment index rose to 2.07; the price difference between copper cathode and copper scrap was 3,979 yuan/mt, down 625 yuan/mt MoM; the price difference between copper cathode rod and secondary copper rod was 1,250 yuan/mt.

According to SMM survey, copper prices stopped falling during the day, boosting purchase confidence among many secondary copper rod enterprises. In contrast, copper scrap traders were reluctant to sell at low copper prices. Therefore, today's copper scrap market was mainly driven by purchases from secondary copper rod enterprises, with relatively low trading activity.

IV. Inventory (October 8)

Social inventory in Shanghai stood at 54,700 mt, up 5,500 mt from pre-holiday levels; social inventory in Jiangsu stood at 22,400 mt, up 9,700 mt from pre-holiday levels.

V. Price Outlook

Macro:

Iran's Revolutionary Guard attacked an LPG vessel illegally transiting the Strait of Hormuz and expanded its tracking range, stating that the US has accepted some conditions for reopening, but threatening to strike regional cables and data centers if fighting resumes; Israeli media reported that Israel has no intention of attacking Iran again before the month-end parliamentary elections. US consumer confidence hit a new low since May, inflation expectations heated up, and Trump launched an investigation seeking to remove Fed Governor Cook. Market sentiment eased somewhat, and combined with mine supply disruptions, this provided support for copper prices.

Fundamentals:

Supply side: Some imported copper and domestic cargoes arrived successively, increasing the availability of market supply and easing supply marginally. Demand side: High copper prices and a wide price spread between futures contracts dampened purchase willingness, with downstream players largely staying on the sidelines and overall demand remaining weak.

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.