Expectations for US Fed Interest Rate Hikes Intensify, Copper Prices Retreat After Rapid Rise, Spot Premiums Fluctuate at Highs [SMM Copper Morning Briefing]

2026.8.31 Monday
Futures: Last Friday night, LME copper opened at $14,351.5/mt, touched a high of $14,383/mt in early trading, then drifted lower all the way and dipped to $14,214.5/mt near the end of the session, before swinging higher to close at $14,285/mt, down 0.15%. Trading volume reached 16,900 lots, and open interest reached 270,000 lots, down 215 lots from the previous trading day, reflecting long liquidation. Last Friday night, the most-traded SHFE copper contract opened at 109,200 yuan/mt, moved widely in early trading and rose to 109,300 yuan/mt, then the copper price center fell straight down to touch a low of 108,150 yuan/mt, and finally closed at 108,570 yuan/mt, down 0.05%. Trading volume reached 58,000 lots, and open interest reached 215,000 lots, down 1,422 lots from the previous trading day, reflecting long liquidation.
[SMM Copper Morning Meeting Summary] News:
(1) On Friday, August 28, data released by Azerbaijan's State Customs Committee showed that from January to July this year, Azerbaijan exported more than 69,117 mt of copper ore and concentrates, worth nearly $153 million. YoY, export value increased by more than $136 million (up 9.5-fold), and export volume increased by 59,051 mt (up 6.8-fold). During the reporting period, export revenue from copper ore and concentrates accounted for 0.5% of Azerbaijan's total exports.
Spot:
(1) Shanghai: On August 28, SMM #1 copper cathode spot prices against the SHFE copper 2609 contract were quoted at premiums of 500-570 yuan/mt, with an average of 535 yuan/mt, up 85 yuan/mt from the previous trading day. In early trading, the SHFE copper 2609 contract showed an overall upward trend. After the open, prices quickly rose above 109,100 yuan/mt, then volatility intensified at highs, and prices once pulled back to around 108,950 yuan/mt; thereafter prices strengthened again, with the intraday high near 109,220 yuan/mt. Near midday, prices continued to consolidate at highs, eventually closing at 109,200 yuan/mt. The Back month spread was between 330 yuan/mt and 370 yuan/mt, and the SHFE copper 2609 contract import profit/loss was between a loss of 1,700 yuan/mt and a loss of 1,630 yuan/mt. During the day, sales sentiment for cathode copper in Shanghai was 3.10, up 0.13 DoD, while procurement sentiment was 3.34, down 0.10 DoD; historical data can be queried in the database. Looking ahead to today, spot premiums in the Shanghai market have risen to near the year's highs. As premiums have risen rapidly and continuously, downstream acceptance of high-priced cargoes has weakened somewhat, and the upward momentum for spot premiums is expected to diminish. Supply side, according to SMM, some non-registered copper that was delayed from entering warehouses due to port congestion is expected to arrive at ports gradually this week, providing some replenishment to available cargoes in the Shanghai market. At the same time, after spot price spreads between Shanghai and surrounding regions widened, cross-regional arbitrage windows have opened, and some cargoes from other regions can be shipped to Shanghai, which may marginally ease the tight supply situation later. However, after entering September, a new procurement cycle is about to begin, and some downstream users and traders have restocking demand at the beginning of the month. In addition, current inventories and available cargoes in the Shanghai market remain relatively tight, supporting spot premiums from below. Overall, given expectations for increased imports and cross-regional supply replenishment, high premiums curbing chasing demand, and upcoming early-month procurement demand, spot copper in Shanghai is expected to remain at high premiums against the SHFE copper 2609 contract this week. There is limited room for the premium center to continue rising sharply, and a slight pullback cannot be ruled out; overall, the market may consolidate at highs.
(2) Guangdong: On Aug 28, Guangdong #1 copper cathode spot against the front-month contract: high-quality copper was quoted at a premium of 250 yuan/mt, down 10 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 120 yuan/mt, down 50 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 60 yuan/mt, down 50 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 109,225 yuan/mt, up 145 yuan/mt from the previous trading day, and the average SX-EW copper price was 109,100 yuan/mt, up 125 yuan/mt from the previous trading day. Purchase sentiment for copper cathode in Guangdong was 2.69, down 0.09 from the previous trading day, and selling sentiment was 2.95, up 0.06 (historical data can be queried in the database). Overall, rising copper prices and weak end-use consumption near month-end pushed spot premiums lower.
(3) Imported copper: On Aug 28, the average warrant price fell $10/mt from the previous trading day to $75/mt (price range: $70-80/mt); the average B/L price fell $10/mt from the previous trading day to $70/mt (price range: $60.5-80/mt); the average EQ copper (CIF B/L) price fell $8/mt from the previous trading day to $30/mt (price range: $20-40/mt), with quotes referencing cargoes arriving from end-August to mid-September.
(4) Secondary copper: On Aug 28 at 11:30, the futures closing price was 109,200 yuan/mt, up 230 yuan/mt from the previous trading day; the average spot premium was 535 yuan/mt, up 85 yuan/mt from the previous trading day. Today secondary copper scrap prices remained unchanged from the previous trading day. The sales sentiment index for secondary copper scrap fell to 2.81, and the purchase sentiment index fell to 1.73. The copper cathode-scrap price spread was 5,159 yuan/mt, up 315 yuan/mt from the previous trading day, and the copper cathode rod-secondary copper rod price spread was 1,870 yuan/mt. According to SMM survey, copper price centers shifted higher again. With the weekend approaching, secondary copper rod producers said current orders were mainly hedging-related purchases by traders; due to fear of high prices, end-use wire and cable enterprises purchased very limited volumes, and intraday secondary copper rod trades were muted.
Prices: On the macro front, geopolitical developments included mutual attacks between the US and Iran and tanker attacks, and Trump said the strait had opened. Subsequently, the preliminary US nonfarm payroll benchmark revision was released far below market expectations. Several Fed officials made hawkish remarks, market expectations for a September rate hike increased, and copper prices shot up and then pulled back. On the fundamentals side, available spot cargoes and inventories on the supply side remained tight, and high-quality copper supply was scarce. On the demand side, high premiums suppressed purchase willingness, but expectations for early-month restocking partially underpinned demand. Overall, copper prices are expected to consolidate on a subdued note today.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]