Geopolitical conflicts persist but inflation pressures ease, copper prices boosted, LME copper and SHFE copper both strengthen in night session [SMM Copper Morning Briefing]

Wednesday, July 15, 2026
Futures: Overnight, LME copper opened at $13,633/mt, edged down to $13,581/mt in early trading, then rose to touch a high of $13,707.5/mt, and finally settled at $13,600/mt, up 0.90%. Trading volume reached 21,000 lots, and open interest stood at 243,000 lots, down 3,933 lots from the previous trading day, reflecting bear position reductions. Overnight, the most-traded SHFE copper 2608 contract opened at 104,700 yuan/mt, edged up to 105,140 yuan/mt in early trading, then drifted lower to touch a low of 104,540 yuan/mt, and finally settled at 105,140 yuan/mt, up 0.28%. Trading volume reached 31,000 lots, and open interest stood at 144,000 lots, down 783 lots from the previous trading day, reflecting bear position reductions.
[SMM Copper Morning Briefing] News:
(1) On Tuesday, July 14, the DRC's leading mining industry body warned that proposed revisions to the mining code aimed at strengthening state control could undermine investor confidence in the world's largest cobalt producer. The DRC is the world's second-largest copper supplier and a major supplier of gold, tantalum, and germanium. Like many other resource-rich African nations, it has intensified efforts in recent years to boost revenue from its vast mineral wealth. Key amendments to its mining code would expand state control over strategic and reserve minerals, allow for the establishment of strategic stockpiles, and strengthen regulatory and anti-fraud oversight through a specialized mining sector agency. The pace of reform is a concern.
Spot:
(1) Shanghai: During the morning session, the SHFE copper 2607 contract consolidated sideways, with an overall slight upward trend. It opened at 103,940 yuan/mt, and after the opening, prices maintained narrow fluctuations mostly between 103,950 yuan/mt and 104,280 yuan/mt, with the overall price center shifting slightly higher to close at 104,310 yuan/mt. The backwardation spread between the spot month and the next month ranged from 180 yuan/mt to 340 yuan/mt. The import profit margin for SHFE copper against the 2607 contract ranged from a profit of 510 yuan/mt to 780 yuan/mt. Looking ahead, today marks the last trading day for the SHFE copper 2607 contract. SMM consistently quotes against the front-month contract. The current open interest for the 2607 contract is about 4,500 lots, and SHFE warrant data show 47,158 mt of warrants on July 13, indicating relatively sufficient warrants to cover delivery demand. Supply side, recent social inventory drawdown has continued rapidly, mainly due to low arrivals of both domestic and imported cargoes, leaving the tight supply circulation pattern unchanged. The backwardation spread between the spot month and the next month widened to 180-340 yuan/mt, with the front-month contract showing strong performance. In addition, some suppliers have already started quoting against the 2608 contract, with standard-quality copper at a premium of around 300 yuan/mt, reflecting optimistic market expectations for premiums after the contract rollover. Overall, supported by the backwardation structure and dominated by delivery logic, SHFE spot copper quotes against the 2607 contract are expected to sustain premiums today.
(2) Guangdong: On July 14, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper reported at 80 yuan/mt, unchanged from the previous trading day; standard-quality copper reported at a discount of 20 yuan/mt, down 10 yuan/mt from the previous trading day; SX-EW copper reported at a discount of 80 yuan/mt, down 10 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 104,105 yuan/mt, up 785 yuan/mt from the previous trading day, and the average price of SX-EW copper was 104,010 yuan/mt, up 795 yuan/mt from the previous trading day. Overall, with both inventory and copper prices rising, suppliers had to lower prices to sell, leading to subdued trading.
(3) Imported copper: On July 14, the average warrant price rose by $4/mt from the previous trading day to $90/mt (price range: $85-95/mt); the average B/L price rose by $4/mt to $89/mt (price range: $83-95/mt); the average EQ copper (CIF B/L) price rose by $2/mt to $56/mt (price range: $52-60/mt), with quotations referencing cargoes arriving from July to mid-August. On July 13, LME data showed that copper cancelled warrants on July 10 were 130,525 mt, an increase of 25,725 mt from the previous period. As market-available imported copper supply tightened in stages from July to August, alongside continued destocking of domestic social inventory, the import window opened in stages, with some warrants already shipped to the Chinese market after cancellation from the LME. However, the current supply deficit continues to materialize, with reports on July 13 that registered B/Ls arriving from late July to early August traded mainly at $90-95/mt, and registered warrants changing hands in late July at around $95/mt. On July 14, it was heard that quotations for registered B/Ls in late July continued to test three-digit levels, and EQ copper in late July was quoted at $65/mt.
(4) Secondary copper: On July 14, at 11:30, the futures closing price was 104,310 yuan/mt, up 1,150 yuan/mt from the previous trading day. The average spot premium was 155 yuan/mt, down 60 yuan/mt from the previous trading day. On July 14, secondary copper raw material prices rose 300 yuan/mt from the previous trading day. The sales sentiment index for secondary copper raw materials rose to 2.42, and the purchasing sentiment index fell to 2.27. The price spread between copper cathode and copper scrap was 3,180 yuan/mt, up 735 yuan/mt from the previous trading day. The price spread between copper cathode rod and secondary copper rod was 1,510 yuan/mt. According to SMM survey, with copper prices rising quickly, secondary copper raw material prices lacked upward momentum. Due to limited new orders in the off-season for downstream secondary copper rod enterprises and scrap-derived copper anode enterprises, and amid policy instability, they showed no interest in high-priced cargoes. Many secondary copper rod enterprises had already stopped pricing with secondary copper raw material traders in early trading, and trading was subdued during the day.
Prices: On the macro front, US June unadjusted CPI YoY growth slowed to 3.5%, with the seasonally adjusted MoM reading at -0.4%, the first decline in six years, cooling rate hike expectations. On the geopolitical front, the US and Iran continued mutual strikes, and the US military resumed a maritime blockade against Iran at 4 a.m. Trump stated that only Iranian shipping would be blockaded, and Gulf countries' trade and investment agreements could substitute 20% of transit fees; if no agreement is reached by next week, strikes will target Iranian power plants. Iran stated that the US has entered a formal state of war, and the deputy foreign minister said there is currently no commitment to the memorandum of understanding. With Middle East tensions persisting and rate hike expectations diminishing, copper prices rose. On the fundamental side, the tight supply pattern remained unchanged, with both domestic and imported cargo arrivals still limited; demand-side performance was weak, with end-user uptake sluggish and still dominated by need-based restocking. Overall, copper prices are expected to drift slightly higher 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 not use this as a replacement for their own independent judgment. Any decisions made by the client are not related to SMM.]