Copper prices consolidate under pressure as supply marginally loosens and demand stays weak [SMM Copper Morning Meeting Minutes]

Thursday, September 3, 2026
Futures: Overnight, LME copper opened at $14,127/mt, dipped to a low of $14,102.5/mt in early trading, then rebounded sharply to a high of $14,292.5/mt before drifting lower to close at $14,236.5/mt, up 0.31%. Trading volume reached 22,700 lots, and open interest stood at 268,600 lots, up 3,229 lots from the previous trading day, driven by long positioning. Overnight, the most-traded SHFE copper 2610 contract opened at 108,500 yuan/mt, dipped to 108,310 yuan/mt in early trading, then rebounded to a high of 108,760 yuan/mt before drifting lower to close at 108,390 yuan/mt, up 0.26%. Trading volume reached 28,300 lots, and open interest stood at 206,000 lots, down 876 lots from the previous trading day, driven by short covering.
[SMM Copper Morning Briefing] News:
(1) According to Mining.com citing Reuters, Argentina and Chile aim to unlock billions of dollars in mining investment by improving regulatory policies, including allowing companies to share infrastructure and resources across the Andes. Chile and Argentina signed the Mining Integration and Complementation Treaty in 1997, but its impact has been limited for decades. To advance a new generation of copper mine projects, officials from both countries have held a new round of negotiations to reinvigorate the treaty. While no further details were disclosed, the Chilean government said that during the talks, the two countries approved the Vicuña, NexoAndino, and Filo Sur mining projects, with deposits located along the border between Argentina's San Juan Province and Chile's Atacama Region. Both governments seek to attract private investment, making the initiative mutually beneficial. Chile's Mining Minister Daniel Mas said this month that the framework could help unlock $20.7 billion in mining project investment and boost global annual copper production by 540,000 mt. A key attraction for investors is that projects on the Argentine side adjacent to Chile can access Chilean infrastructure such as ports, reducing costs and shortening transport routes, helping new mines come online sooner.
Spot:
(1) Shanghai: On September 2, SMM #1 copper cathode spot premiums against the SHFE copper 2609 contract were quoted at 300-450 yuan/mt, with an average of 375 yuan/mt, down 120 yuan/mt from the previous trading day. The SHFE copper 2609 contract drifted lower before stabilizing at low levels. After the open, prices briefly consolidated in the 108,850-108,950 yuan/mt range, then weakened quickly, dipping to an intraday low near 108,150 yuan/mt. Prices subsequently edged up and moved sideways in the 108,350-108,500 yuan/mt range, closing near 108,440 yuan/mt before midday. The backwardation spread between the front and next month stood at 550-670 yuan/mt, and the import profit margin for SHFE copper against the 2609 contract was at a loss of 690-790 yuan/mt. During the day, the sales sentiment for copper cathode in Shanghai was 3.41, up 0.1 MoM, while procurement sentiment was 3.06, down 0.09 MoM. Historical data can be queried in the database. Looking ahead to today, the absolute SHFE copper price pulled back from the previous trading day, releasing some downstream dip-buying demand, with market transactions improving slightly from earlier. However, the backwardation spread between the front and next month widened again to above 550 yuan/mt, raising rollover costs for suppliers and significantly boosting their willingness to sell. Intraday quotes for standard-quality copper were lowered repeatedly to facilitate deals, exerting strong pressure on spot premiums. Meanwhile, although downstream users made some just-in-time procurement, their acceptance of the still-elevated spot premiums was limited, with buying concentrated on lower-priced cargoes and little willingness to chase higher prices. Overall, with the widening backwardation, active supplier selling, and downstream push for lower prices, spot premiums for SHFE copper against the 2609 contract are expected to face modest downward pressure today. However, with demand improving marginally after the copper price pullback and lower-priced cargoes trading relatively smoothly, the room for further premium declines is expected to be relatively limited.
(2) Guangdong: On September 2, spot #1 copper cathode in Guangdong against the front-month contract: high-quality copper was quoted at a premium of 260 yuan/mt, down 30 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 180 yuan/mt, down 10 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 110 yuan/mt, down 20 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 108,665 yuan/mt, down 1,595 yuan/mt from the previous trading day, and the average price of SX-EW copper was 108,555 yuan/mt, down 1,595 yuan/mt from the previous trading day. The procurement sentiment for copper cathode in Guangdong stood at 2.51, down 0.08 from the previous trading day, while the selling sentiment stood at 2.92, up 0.03 from the previous trading day (historical data can be queried in the database). The procurement sentiment for copper cathode in Guangdong stood at 2.51, down 0.08 from the previous trading day, while the selling sentiment stood at 2.92, up 0.03 from the previous trading day (historical data can be queried in the database).
(3) Imported copper: On September 2, the average price for warrants rose $4/mt from the previous trading day to $76/mt (price range $72-80/mt); the average price for B/L rose $4/mt from the previous trading day to $74/mt (price range $68-80/mt); the average price for EQ copper (CIF B/L) rose $10/mt from the previous trading day to $40/mt (price range $30-50/mt), with quotes referencing cargoes arriving in September.
(4) Secondary copper: On September 2 at 11:30, the futures closing price was 108,440 yuan/mt, down 1,440 yuan/mt from the previous trading day. The average spot premium was 375 yuan/mt, down 120 yuan/mt MoM from the previous trading day. Today, secondary copper raw material prices fell 600 yuan/mt MoM. The selling sentiment index for secondary copper raw materials fell to 2.84, while the procurement sentiment index rose to 1.79. The price difference between copper cathode and copper scrap was 3,329 yuan/mt, down 875 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,350 yuan/mt. According to the SMM survey, copper prices retreated after a rapid rise. In the short term, secondary copper raw material traders held back from selling and withheld cargoes. Although secondary copper rod enterprises wanted to take advantage of the low prices to procure secondary copper raw materials, suppliers were unwilling to sell their inventories at a discount, so market trading activity declined significantly.
Prices: On the macro front, regarding the Middle East situation, Trump said he is ready to strike Iran again at any time but denied facilitating talks; his aides are pushing for a "low-key" handling of the conflict due to election pressure; Iran's parliament speaker stressed that the strait would only be reopened after the US fulfills its obligations. US August ADP employment rose by only 38,000, missing expectations. Williams said interest rates are appropriate, and the Beige Book showed the economic outlook is broadly positive, though uncertainty has risen somewhat. The US dollar index closed lower, providing some bullish support for copper prices. On the fundamentals side, supply-side arrivals of imported cargoes at ports, combined with contract rollover demand, prompted suppliers to actively sell, leaving overall supply marginally looser. On the demand side, after copper prices pulled back, some downstream buyers bought the dip, but overall purchases remained primarily need-based, with limited improvement. Taken together, 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.]