Global Copper Cathode Supply Surplus in January; Overnight LME Copper and SHFE Copper Extended Losses [SMM Copper Morning Briefing]

Friday, March 20, 2026
Futures: Overnight, LME copper opened at $12,093.5/mt. In early trading, the center of copper prices gradually moved lower and fell to $11,754/mt, then fluctuated upward to a high of $12,228.5/mt, before seeing wide swings and finally closing at $12,211.5/mt, down 1.05%. Trading volume reached 46,900 lots, open interest stood at 288,600 lots, up 239 lots from the previous trading day. Overnight, the most-traded SHFE copper 2605 contract opened at 92,500 yuan/mt. It dipped to 91,820 yuan/mt in early trading, then the center of copper prices fluctuated upward to a high of 95,530 yuan/mt, before fluctuating rangebound and finally closing at 94,920 yuan/mt, down 0.91%. Trading volume reached 153,000 lots, open interest stood at 197,000 lots, down 6,302 lots from the previous trading day, mainly due to long liquidation by bulls.
[SMM Copper Morning Meeting Summary] News:
(1) On Wednesday, March 18, the latest report released by the World Bureau of Metal Statistics (WBMS) showed that in January 2026, global refined copper production was 2.3468 million mt, consumption was 2.2175 million mt, and the market recorded a surplus of 129,300 mt. In January 2026, global copper concentrates production was 1.6298 million mt.
Spot:
(1) Shanghai: On the morning of March 19, the SHFE copper 2604 contract showed a pattern of falling first, stabilizing, and then fluctuating rangebound. It opened at 96,100 yuan/mt and continued to decline after the opening, falling to 95,430 yuan/mt. Prices then stabilized and fluctuated between 95,550 yuan/mt and 95,820 yuan/mt, with the closing price at 95,680 yuan/mt. The backwardated price spread between futures contracts for nearby months ranged from 40 yuan/mt to 80 yuan/mt, and the import profit margin for SHFE copper in the current month ranged from a profit of 80 yuan/mt to a profit of 200 yuan/mt. During the day, the SHFE copper 2604 contract extended its decline, with the trading range moving further lower to 95,500-96,000 yuan/mt. The center of copper prices kept moving lower, significantly stimulating downstream enterprises' demand to buy the dip and restock, while spot market trading sentiment clearly recovered. Demand side, according to SMM, orders at most downstream enterprises surged, rising substantially from the previous period, and end-user cargo pick-up enthusiasm also increased in tandem. The pullback in copper prices became more attractive to enterprises, and purchase willingness for buying the dip was strong. Suppliers took the opportunity to hold prices firm, driving a marked rebound in spot premiums during early trading. Supply side, social inventory destocked sharply by 24,200 mt from Monday, and the pace of destocking accelerated. The rebound in spot premiums increased suppliers' willingness to sell, leading to more warrants flowing into the market. As premiums reached the psychological expectations of some suppliers, selling of spot warrants began to emerge, easing the previously tight spot supply situation and causing spot premiums to decline afterward. Overall, current copper prices became more attractive to downstream enterprises, and faster destocking supported the spot market. However, suppliers selling at highs together with changes in the price spread between futures contracts structure pressured premiums. Amid the tug-of-war between sellers and buyers, Shanghai spot copper is expected to maintain this stalemate today, and spot premiums may remain in the discount range.
(2) Guangdong: On March 19, Guangdong spot #1 copper cathode against the front-month contract was quoted at 140 yuan/mt for high-quality copper, up 90 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 20 yuan/mt, up 80 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 40 yuan/mt, up 80 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 95,735 yuan/mt, down 3,400 yuan/mt from the previous trading day, while the average price of SX-EW copper was 95,615 yuan/mt, up 3,405 yuan/mt from the previous trading day. Overall, sharp declines in copper prices prompted active downstream restocking, and spot premiums rose significantly.
(3) Imported copper: On March 19, the average warrant price was unchanged from the previous trading day at $47/mt (price range $42-52/mt); the average B/L price was unchanged from the previous trading day at $46/mt (price range $41-51/mt); the average EQ copper (CIF B/L) price rose $1/mt from the previous trading day to $26/mt (price range $21-31/mt), with quotations referencing cargoes scheduled to arrive from late March to mid-April.
(4) Secondary copper: As of 11:30 on March 19, the futures closing price was 95,620 yuan/mt, down 3,040 yuan/mt from the previous trading day; the average spot premiums was -30 yuan/mt, up 60 yuan/mt from the previous trading day. On March 19, copper scrap prices fell 3,200 yuan/mt MoM, the sales sentiment index for copper scrap fell to 2.34, the purchase sentiment index fell to 2.41, and the price difference between copper cathode and copper scrap was -461 yuan/mt, down 460 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 415 yuan/mt. According to the SMM survey, after copper prices plunged, neither copper scrap suppliers nor downstream enterprises using copper scrap issued quotations, instead waiting on the sidelines for copper prices to stabilize before resuming purchase and sales quotations for copper scrap. As market quotations were scarce, intraday transactions in copper scrap were sluggish.
Prices: On the macro front, expectations for US Fed interest rate cuts continued to cool, and the market even began pricing in bets on rate hikes. In the Middle East, there were signs of easing in the conflict over energy infrastructure: the US and Israel denied attacking Iranian gas fields and pledged to suspend strikes, while the US even indicated it might lift maritime oil sanctions on Iran to curb oil prices. However, Iran stressed that retaliation was not over and planned to impose transit fees on the Strait of Hormuz, leaving geopolitical uncertainty still in place. Oil prices remained elevated, intensifying market concerns over inflation and economic weakening, and together with LME inventory at high levels, copper prices remained under pressure. Fundamentals, arrivals of both imported and domestic cargoes were steady, and overall supply was ample; demand side, downstream purchase willingness rebounded somewhat as copper prices pulled back. Inventory side, as of Thursday, March 19, SMM copper inventories across major regions in China fell 8.85% WoW from the previous Thursday, while total inventories increased 176,700 mt YoY, with destocking seen in all regions. Overall, copper prices are expected to fluctuate rangebound 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 replace their own independent judgment with this information. Any decisions made by clients are unrelated to SMM.]