SMM Copper Morning Briefing | Thursday, October 22, 2026

Overnight, both LME copper and SHFE copper closed lower, with LME copper seeing long liquidation and SHFE copper seeing short covering. The continued rebound in LME copper inventories eased supply concerns, while uncertainty in the Middle East kept the market cautious. Copper prices are expected to consolidate on a subdued note in a narrow range today.

1. Overnight Futures

LME copper opened at $14,300/mt, hit a high of $14,383/mt and a low of $14,278.5/mt, and closed at $14,370.5/mt, down 0.59%. Trading volume was 16,800 lots and open interest was 262,000 lots, down 2,551 lots from the previous trading day, indicating long liquidation.

The most-traded SHFE copper 2611 contract opened at 109,096 yuan/mt, hit a high of 109,640 yuan/mt and a low of 109,010 yuan/mt, and closed at 109,570 yuan/mt, down 0.15%. Trading volume was 18,500 lots and open interest was 145,000 lots, down 2,372 lots from the previous trading day, indicating short covering.

2. News

Canadian miner Teck Resources said it has received a strike notice from United Steelworkers Local 7619 at its Highland Valley Copper mine. The union could begin a strike as early as 8:00 a.m. Pacific Time on October 24, which is 23:00 Beijing time on October 24.

The collective agreement at Highland Valley Copper expired on September 30, and the mine remains in operation. Teck Resources has contingency plans in place to ensure safe production and environmental management during any labor action, and said it remains committed to reaching a collective agreement with the union that balances employee interests and continued mine operations.

3. Spot Market

1) Shanghai

Procurement sentiment was 3.12, up 0.11 WoW; sales sentiment was 3.15, up 0.08 WoW.

On October 21, SMM #1 copper cathode spot prices against the SHFE copper 2611 contract were reported at premiums of 620–800 yuan/mt, with an average premium of 710 yuan/mt, down 15 yuan/mt from the previous trading day.

The SHFE copper 2611 contract closed the morning session at 109,820 yuan/mt, with the next-month Back spread at 640–680 yuan/mt and import losses for the current month at around 620–700 yuan/mt.

Some delivered warrants continued to flow into the spot market, but the released volume remained relatively limited, with no significant pressure on spot premiums yet. After suppliers lowered offers to facilitate transactions, lower-priced cargoes traded quickly, and market quotes still found some support.

Centralized procurement by State Grid drove order and purchasing demand release at some processing enterprises. Consumption improved during the day, but order performance diverged among enterprises, and overall procurement remained primarily need-based. Shanghai spot premiums are expected to stay high.

2) Guangdong

procurement sentiment stood at 2.63, up 0.05 WoW; sales sentiment stood at 2.71, down 0.04 WoW.

• High-quality copper was quoted at a premium of 730 yuan/mt, up 30 yuan/mt from the previous trading day.
• Standard-quality copper was quoted at a premium of 460 yuan/mt, up 30 yuan/mt from the previous trading day.
• SX-EW copper was quoted at a premium of 400 yuan/mt, up 30 yuan/mt from the previous trading day.

The average price of #1 copper cathode in Guangdong was 110,460 yuan/mt, up 820 yuan/mt from the previous trading day; the average price of SX-EW copper was 110,265 yuan/mt, also up 820 yuan/mt.

Falling local inventories prompted suppliers to hold prices firm, and spot premiums edged up. Attention should be paid to whether inventories can continue to decline; if they do, the premium center may shift further upward.

3) Imported copper

• The average warrant price was $148/mt, up $10/mt from the previous trading day, with a quotation range of $140-156/mt.
• The average B/L price was 135 yuan/mt, up 4 yuan/mt from the previous trading day, with a quotation range of 130-140 yuan/mt.
• The average price of EQ copper (CIF B/L) was $65/mt, up $2/mt from the previous trading day, with a quotation range of $60-70/mt.

Quotations were based on cargoes arriving from October to mid-to-late November.

4) Secondary copper

At 11:30 on October 21, futures closed at 109,820 yuan/mt, up 550 yuan/mt from the previous trading day; average spot premiums stood at a premium of 710 yuan/mt, down 15 yuan/mt WoW.

Secondary copper raw material prices rose 400 yuan/mt WoW, with the sales sentiment index rising to 2.55 and the procurement sentiment index rising to 2.09. The price spread between copper cathode and copper scrap was 2,656 yuan/mt, widening 75 yuan/mt WoW; the price spread between copper cathode rod and secondary copper rod was 730 yuan/mt.

Supply of tax-inclusive secondary copper raw materials in the market was limited. For some cargoes subject to the 3% simplified tax method, the overall tax burden could reach 7.2% or even higher, pushing up raw material procurement costs for secondary copper rod enterprises and keeping secondary copper rod prices at a sustained premium to futures.

IV. Inventories

As of October 19, SMM copper inventories in major Chinese regions fell 900 mt WoW from the previous Monday, remaining above 100,000 mt; this was more than 70,000 mt lower than the 180,000 mt-plus level in the same period last year.

Meanwhile, LME copper inventories rose 8% over the week, easing expectations of tight ex-China supply and exerting some pressure on copper prices.

V. Price Outlook

On the macro front: LME copper inventories continued to increase, alleviating market concerns over tight supply. Iran’s foreign minister stated that there is currently no reason to see progress in negotiations, sending renewed tension signals from the Middle East, and overall market risk appetite remained cautious.

On the fundamentals side: some deliverable warrants continued to flow into the market, but the growth was still relatively limited, and available domestic supply has not yet become notably looser. Demand showed localized improvement, with orders from State Grid driving the release of rigid procurement by some processing enterprises, though order differentiation among enterprises remained pronounced.

Overall assessment: growth in ex-China inventories and easing supply concerns weighed on copper prices, while domestic spot supply remained tight and rigid demand improved somewhat, providing a degree of support for prices. Copper prices are expected to consolidate on a subdued note within a narrow range today, with Shanghai spot premiums remaining at a relatively high level.

The information provided is for reference only and does not constitute a direct recommendation for investment or research decisions. Clients should make decisions prudently and should not use this as a substitute for their own independent judgment.