High premiums curb downstream purchases, copper prices consolidate on a subdued note in the short term [SMM Copper Morning Meeting Summary]

Tuesday, September 1, 2026
Futures: Overnight LME copper was closed for a holiday. Overnight, the most-traded SHFE copper 2610 contract opened at 109,100 yuan/mt, dipped to 109,050 yuan/mt in early trading, then shot up to a high of 109,980 yuan/mt, before drifting lower to close at 109,350 yuan/mt, up 0.62%. Trading volume reached 46,500 lots, and open interest reached 223,000 lots, up 2,121 lots from the previous trading day, showing bullish positioning.
[SMM Copper Morning Briefing] News:
(1) 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 ores and concentrates, worth nearly $153 million. Compared with the same period last year, export value increased by more than $136 million (up 9.5x), and exports increased by 59,051 mt (up 6.8x). During the reporting period, revenue from copper ore and concentrate exports accounted for 0.5% of Azerbaijan's total exports.
Spot:
(1) Shanghai: On August 31, SMM #1 copper cathode spot prices against the SHFE copper 2609 contract were quoted at premiums of 550-670 yuan/mt, with an average of 610 yuan/mt, up 75 yuan/mt from the previous trading day. In early trading, the SHFE copper 2609 contract initially fell before rebounding. After the open, prices dropped quickly, hitting an intraday low of around 108,550 yuan/mt; prices then consolidated at lows and gradually rebounded. Near midday, the rally accelerated notably, with prices rising to around 109,270 yuan/mt before pulling back slightly to close at 109,150 yuan/mt. The Back month spread stood between 500 yuan/mt and 600 yuan/mt, and LME copper was closed today. During the day, the selling sentiment for electrolytic copper in Shanghai was 3.23, up 0.13 MoM, and the purchasing sentiment was 3.50, up 0.16 MoM. Historical data can be queried in the database. Looking ahead to today, the Back month spread of SHFE copper futures is expected to remain at a relatively high level of 570-600 yuan/mt, and with the continued tightness of available supply in the Shanghai market, this provides strong support for spot premiums. According to SMM's market communication, mainstream quotations for current-month standard-quality copper are basically maintained at premiums of 550 yuan/mt and above, with suppliers showing limited willingness to sell at low prices and sentiment to hold prices firm remaining strong. However, as spot premiums have risen continuously to high levels, downstream enterprises' acceptance of current quotations has declined significantly, with some enterprises choosing to postpone purchases and wait for premiums to pull back before restocking. Intraday actual transactions remained dominated by rigid demand. Meanwhile, as a new round of procurement cycles is about to begin in September, some downstream enterprises and traders have restocking demand, which may provide some support below premiums. Overall, supported by high Back month spreads and tight available supply, SHFE copper spot prices against the 2609 contract are expected to remain at high premiums today, but the dampening effect of high premiums on downstream purchases is gradually strengthening, and room for further rapid upside in premiums may be limited, with the market likely to consolidate at highs.
(2) Guangdong: On Aug 31, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 260 yuan/mt, up 10 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 160 yuan/mt, up 40 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 100 yuan/mt, up 40 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 108,925 yuan/mt, down 300 yuan/mt from the previous trading day, and the average price of SX-EW copper was 108,815 yuan/mt, down 285 yuan/mt from the previous trading day. The procurement sentiment for copper cathode in Guangdong was 2.52, down 0.17 from the previous trading day, and the selling sentiment was 2.85, down 0.1 from the previous trading day (historical data can be queried in the database). Overall, downstream procurement willingness was subdued at month-end, and intraday premiums retreated after a rapid rise, with overall trading activity lackluster.
(3) Imported copper: On Aug 31, the average warrant price was flat from the previous trading day at $75/mt (price range: $70-80/mt); the average B/L price was flat from the previous trading day at $70/mt (price range: $60.5-80/mt); the average price of EQ copper (CIF B/L) was flat from the previous trading day at $30/mt (price range: $20-40/mt), with quotes referencing cargoes arriving in September.
(4) Secondary copper: On Aug 31 at 11:30, the futures closing price was 109,150 yuan/mt, down 50 yuan/mt from the previous trading day. The average spot premium was 610 yuan/mt, up 75 yuan/mt WoW from the previous trading day. Secondary copper raw material prices fell 200 yuan/mt WoW. The selling sentiment index for secondary copper raw materials rose to 2.86, while the procurement sentiment index fell to 1.68. The price difference between copper cathode and copper scrap was 5,410 yuan/mt, up 251 yuan/mt WoW. The price difference between copper cathode rod and secondary copper rod was 1,990 yuan/mt. According to SMM survey, on the last trading day of August, copper prices initially fell before rebounding. In early trading, many secondary copper rod enterprises reported sporadic raw material procurement deals, but after midday close, many secondary copper raw material traders raised prices, resulting in very few transactions.
Prices: On the macro front, the US-Iran conflict continued to escalate, with Trump threatening to "hit Iran hard," intensifying geopolitical risks in the Strait of Hormuz; Trump said interest rates are too high but respects Warsh's decisions, while Treasury Secretary Bessent expects oil prices to fall and the conflict to be resolved. On the fundamentals front, supply side, available cargoes remained tight, with suppliers holding prices firm and the overall pattern staying tight; demand side, purchases were mainly just-in-time procurement, with limited willingness to chase higher prices, but month-start restocking expectations partially underpinned demand. Inventory side, as of Monday, Aug 31, SMM copper inventories in mainstream regions across China fell 12,100 mt WoW to 102,100 mt, down 30,000 mt from 132,100 mt in the same period last year. Mine supply remained tight, spot market circulating cargoes were scarce, and with the traditional peak season approaching and downstream restocking expectations, overnight copper prices shot up. 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 cautiously and not use this as a substitute for independent judgment. Any decisions made by clients have no relation to SMM.]