Wednesday, August 19, 2026
Overnight LME copper opened at $14,045/mt, initially touched a high of $14,106.5/mt, then its center moved down and dipped to $13,958/mt, finally settling at $13,961.5/mt, down 1.2%. Trading volume reached 21,000 lots, open interest at 270,000 lots, down 276 lots from the previous trading day, driven by long position reductions. Overnight, the most-traded SHFE copper 2609 contract opened at 107,630 yuan/mt, initially touched a high of 107,770 yuan/mt, then its center plunged to hit a bottom of 106,820 yuan/mt, finally settling at 107,020 yuan/mt, down 0.89%. Trading volume reached 42,000 lots, open interest at 186,000 lots, down 6,652 lots from the previous trading day, driven by long position reductions.
[SMM Copper Morning Meeting Summary] News:
(1) BHP Group (BHP.O) announced its FY2026 results showing both profit and dividends exceeded market expectations. Driven by record-high copper prices, copper business' operating profit contribution surpassed iron ore for the first time, making it the core profit engine of the world's largest listed mining company. For the fiscal year ended June 30, 2026, BHP's underlying attributable profit rose 30% YoY to $13.2 billion, exceeding the Visible Alpha consensus of $12.66 billion. The company declared a final dividend of 99¢ per share, bringing the total annual dividend to $1.72 per share, the highest in four years. After the release, BHP shares once rose over 4.2%.
Spot:
(1) Shanghai: On August 18, the morning session of the SHFE copper 2609 contract showed a weak downward trend, opening at 108,160 yuan/mt and then continuously dipping, hitting a low of 107,650 yuan/mt before stabilizing, mostly trading between 107,590-107,730 yuan/mt. The backwardation spread (Back) between the front- and next-month was between 220-270 yuan/mt. The import profit margin for SHFE copper vs. the 2609 contract in the front month was between a loss of 890-750 yuan/mt. Shanghai electrolytic copper sales sentiment index stood at 3.10, up 0.21 from the previous day, and the purchase sentiment index at 3.05, down 0.28 from the previous day. Historical data can be accessed in the database. Looking ahead to today, the continued pullback in SHFE copper absolute prices is expected to prompt some downstream enterprises to restock at lower prices and traders to purchase, with market transactions improving markedly from the previous day. Standard-quality copper traded relatively smoothly around premiums of 350 yuan/mt, lending some support to spot premiums on the downside. Overall, with copper price falls releasing just-in-time procurement demand, the backwardation structure offering support, but high premiums capping further chasing, SHFE spot copper premiums against the 2609 contract are expected to hold in premium, with the overall center consolidating around current levels.
(2) Guangdong: On August 18, Guangdong #1 copper cathode spot quotes against the front-month contract were at premiums of 120-220 yuan/mt, with an average of 170 yuan/mt, up 200 yuan/mt from the previous trading day. SX-EW copper was quoted at premiums of 40-60 yuan/mt, averaging 50 yuan/mt, up 230 yuan/mt. The average price of Guangdong #1 copper cathode was 107,915 yuan/mt, down 1,710 yuan/mt, and that of SX-EW copper was 107,795 yuan/mt, down 1,680 yuan/mt. Guangdong electrolytic copper purchasing sentiment index stood at 2.29, up 0.14, and sales sentiment at 2.93, up 0.12 from the previous session (historical data can be accessed in the database). Overall, downstream consumption improved after the contract rollover, and trading was relatively active.
(3) Imported copper: On August 18, the warrant average price was unchanged from the previous trading day at $85/mt (price range $70-100/mt); the B/L average price was also unchanged at $80/mt (range $75-85/mt); the EQ copper (CIF B/L) average price fell $2/mt to $53/mt (range $45-61/mt), with quotes referencing cargoes arriving from August to early September.
(4) Secondary copper: On August 18, at 11:30, the futures closing price was 107,690 yuan/mt, down 2,210 yuan/mt from the previous trading day. The average spot premium was 415 yuan/mt, up 335 yuan/mt from the previous day. Secondary copper raw material prices fell 500 yuan/mt from the previous day. The secondary copper raw material sales sentiment index dropped to 2.73, and the purchase sentiment index rose to 1.82. The price difference between copper cathode and copper scrap was 4,098 yuan/mt, down 1,435 yuan/mt from the previous day. The price difference between copper cathode rod and secondary copper rod was 1,430 yuan/mt. According to an SMM survey, after the futures delivery date, copper prices quickly pulled back. Although secondary copper rod enterprises wanted to purchase more, holders of secondary copper raw materials thought prices had fallen too much and were unwilling to sell at low levels, mostly holding prices firm. Tax-included secondary copper raw material prices were relatively firm, quoted at discounts of 1,500 yuan/mt against futures during the day, narrowing 200 yuan/mt from the previous day.
Prices: On the macro front, geopolitical risks in the Middle East remain uncertain. Trump stated he had no intention of restarting negotiations with Iran, and the speaker of the Iranian parliament also said the Strait of Hormuz would remain closed, with regional conflict risks not yet fully easing. Additionally, LME inventories increased for two consecutive days, easing market concerns over tight supply from non-US regions, and this expectation exerted some bearish pressure on copper prices. On the fundamentals side, supply saw marginal improvement as domestic and imported cargoes arrived in small volumes, while on the demand side, the fall in copper prices today is expected to trigger some just-in-time procurement from downstream enterprises, leading to some spot transactions. Overall, copper prices are expected to consolidate on a subdued note in a narrow range today.
[The information provided is for reference only. This document does not constitute direct investment research advice. Clients should make prudent decisions and not use this as a substitute for independent judgment. Any decisions made by clients are not associated with Shanghai Metals Market.]
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