SMM Copper Morning Briefing | Monday, October 19, 2026

Overnight, LME copper closed up 0.35%, driven by short covering; SHFE copper closed down 0.03%, driven by short additions. US Fed policy expectations and multiple geopolitical developments kept longs and shorts in a tug-of-war. Fundamentals showed tight spot availability, and the price pullback stimulated some recovery in downstream buying. Overall, copper prices are expected to consolidate on a strong note within a narrow range today.

1. Overnight Futures

LME copper:

Opened at $14,468/mt, hit a high of $14,509.5/mt, a low of $14,333/mt, and closed at $14,359.5/mt, up 0.35%. Trading volume was 18,800 lots, and open interest was 269,000 lots, down 1,283 lots from the previous trading day, reflecting short covering.

Most-traded SHFE copper 2611 contract:

Opened at 110,000 yuan/mt, hit a high of 110,150 yuan/mt, a low of 109,400 yuan/mt, and closed at 109,420 yuan/mt, down 0.03%. Trading volume was 21,400 lots, and open interest was 177,000 lots, up 67 lots from the previous trading day, reflecting short additions.

2. News

(1) Iranian Foreign Minister Araghchi said Iran's plan to reopen the Strait of Hormuz remains on the negotiating table. Iran's conditions are very clear and have been conveyed to the US in the form of a "seven-day plan." The US has made some responses to the plan, and Iran is currently assessing them. Araghchi said that if the US is sincere and accepts Iran's conditions, the Strait of Hormuz will reopen on the sixth day, and negotiations will begin on the seventh day.

(2) The US midterm elections will be held on November 3, with Democrats and Republicans competing for all 435 seats in the House of Representatives and 35 of the 100 Senate seats. In addition, multiple US states will elect governors, state legislators, and some local officials.

3. Spot Market

1) Shanghai

Purchasing sentiment was 3.01, up 0.21 MoM; sales sentiment was 3.12, up 0.20 MoM.

On October 16, SMM #1 copper cathode spot prices against the SHFE copper 2611 contract were quoted at premiums of 730-920 yuan/mt, with an average premium of 825 yuan/mt, up 740 yuan/mt from the previous trading day.

Last Friday, the phased pullback in futures prices helped release some orders and purchasing demand from downstream copper processing enterprises. Combined with relatively tight available supply in the market, suppliers showed strong willingness to hold prices firm and hold back from selling, jointly driving spot premiums sharply higher.

On the supply side, delivery volume for the SHFE copper 2610 contract was 4,895 lots. After delivery, close attention should be paid to the pace of warrant cancellations and the return of supply to the spot market. If the deliverable supply is released in a concentrated manner later, the tightness of available supply in the Shanghai market may ease somewhat, and the current high premiums will face some pullback pressure; however, if the outflow of warrants remains slow, the short-term tight supply will continue to support premiums.

2) Guangdong

Procurement sentiment was 2.48, up 0.1 from the previous trading day; selling sentiment was 2.69, up 0.1 from the previous trading day.

On October 16, Guangdong #1 copper cathode spot prices against the front-month contract:

High-quality copper was quoted at a premium of 830 yuan/mt, up 680 yuan/mt from the previous trading day;

Standard-quality copper was quoted at a premium of 530 yuan/mt, up 630 yuan/mt from the previous trading day;

SX-EW copper was quoted at a premium of 470 yuan/mt, up 630 yuan/mt from the previous trading day.

Supply side, Guangdong inventory increased again. Yesterday was the delivery day, downstream consumption was poor, and suppliers had to deliver goods to warehouses. Demand side, after the contract rollover, downstream procurement willingness increased somewhat, and lower copper prices were one of the reasons for the increase in procurement volume. Attention should be paid to warehouse arrivals next week. If inventory declines, premiums are expected to continue to rise.

Overall, spot premiums rose sharply after delivery, downstream enterprises slightly increased procurement volume due to lower copper prices, and overall trading was slightly better than last Thursday.

3) Imported copper

October 16:

Average warrant price was $137/mt, up $1/mt from the previous trading day, with a price range of $124-150/mt;

Average B/L price was 130 yuan/mt, up $1/mt from the previous trading day, with a price range of 122-138 yuan/mt;

Average EQ copper (CIF B/L) price was $64/mt, flat from the previous trading day, with a price range of $60-68/mt.

Quotes are based on cargoes arriving at ports from October to early November.

Last Friday, the SHFE/LME price ratio continued to recover. During the week, downstream demand was moderate, and expectations of tight available supply and sustained high domestic trade premiums continued to give suppliers confidence to hold prices firm.

4) Secondary copper

At 11:30 on October 16, futures closing price was 110,170 yuan/mt, up 560 yuan/mt from the previous trading day; average spot premiums were 825 yuan/mt, up 740 yuan/mt WoW from the previous trading day.

Secondary copper raw material prices were flat MoM; selling sentiment index fell to 2.53, while procurement sentiment index was flat at 2.02; price difference between copper cathode and copper scrap was 3,524 yuan/mt, up 730 yuan/mt MoM; price difference between copper cathode rod and secondary copper rod was 950 yuan/mt.

According to SMM survey, copper prices stopped falling and rebounded, but procurement by secondary copper rod enterprises did not recover, and secondary copper raw material traders were also unwilling to sell. Many scrap utilization enterprises believed that copper prices were neither rising nor falling at this point, making procurement inappropriate.

IV. Inventory (October 15)

Social inventory in Shanghai stood at 70,200 mt, up 3,700 mt WoW; social inventory in Jiangsu stood at 22,000 mt, up 2,200 mt WoW.

As of Thursday, October 15, SMM nationwide mainstream copper inventories rose 12,100 mt WoW from the previous Thursday to around 110,000 mt, with total inventory down more than 60,000 mt from above 170,000 mt in the same period last year.

V. Price Outlook

Macro:

Fed Chairman Warsh declined to reveal future rate decisions, and market expectations for an October rate hike fell below 15%. The US dollar index edged lower, providing some support to copper prices. On the geopolitical front, Ukraine attacked Russian refineries, raising market concerns over tighter energy supply, while Trump announced exemptions for multiple sanctions, restrictive measures, and tariffs on Russia.

Fundamentals:

Supply side: Available supply in the market is relatively tight, with suppliers showing strong willingness to hold prices firm and hold back from selling. Demand side: The phased pullback in copper prices has driven a marginal recovery in downstream purchasing sentiment, but the sustainability of orders under high copper prices still warrants attention.

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