SMM Copper Morning Briefing | Oct 8, 2026, Thursday

Overnight LME copper closed up 0.29%, driven by bulls adding positions; SHFE copper was closed for the National Day holiday. Expectations for US Fed interest rate hikes and rising US inflation expectations pushed the US dollar higher, leaving copper prices encountering resistance. Copper prices are expected to continue to consolidate at highs in a narrow range today.

1. Overnight Futures

LME copper:

Opened at $14,428/mt, hit a high of $14,491.5/mt and a low of $14,332/mt, and closed at $14,451.5/mt, up 0.29%. Trading volume was 13,000 lots, and open interest was 260,000 lots, up 542 lots from the previous trading day, indicating bulls adding positions.

SHFE copper: Closed for the National Day holiday.

2. News

Bank of America raised its long-term copper price forecast, citing tightening supply outside the US and persistently tight conditions in Asian markets, while warning that high oil prices and the ongoing Iran conflict could continue to weigh on precious metals in the near term.

The bank raised its 2031 copper price forecast by 20% to $13,577/mt, citing restricted copper supply outside the US due to continued inflows into warehouse financing deals and tight supply in Asian markets. The bank said that while the Iran war may cap upside for base metals in the near term, supply-side pressures are expected to support prices over the long term.

On precious metals, the bank said gold could fall toward $3,750/oz in Q4 2026, while a surge in oil prices to $150/bbl could drag next year's average gold price to around $3,500/oz. Silver may track gold more closely after solar cell manufacturers' demand weakened; platinum should be supported by a supply deficit. Palladium is expected to remain under pressure due to oversupply and weakening demand from automakers.

Bank of America also said it expects the coking coal market to remain in deficit this year and next due to production headwinds, supporting prices near $250/mt. The bank also forecast a slight lithium surplus next year as production rises, and warned that higher cobalt prices could prompt automakers to reduce usage of this battery metal.

3. Spot Market

1) Shanghai

Procurement sentiment was 2.41, up 0.38 MoM; sales sentiment was 2.45, down 0.73 MoM.

On Sep 30, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at a premium of 850–1,100 yuan/mt, with an average premium of 975 yuan/mt, down 75 yuan/mt from the previous trading day.

In early trading, the SHFE copper 2610 contract opened higher with a gap, then retreated after a rapid rise, and subsequently consolidated at highs. After the market opened, prices quickly surged, reaching an intraday high of around 110,500 yuan/mt, then pulled back to around 110,390 yuan/mt. Copper prices then consolidated around the 110,400 yuan/mt level, briefly dipping to around 110,330 yuan/mt before rebounding to around 110,450 yuan/mt and pulling back again, closing the morning session at 110,370 yuan/mt.

The backwardation spread between next-month and front-month contracts was between 740 and 860 yuan/mt; the import profit margin of SHFE copper against the 2610 front-month contract was between a loss of 630 and 450 yuan/mt.

Before the holiday, downstream processing enterprises had largely completed their holiday stockpiling and had made advance arrangements with suppliers for cargo pick-up during the holiday. Supply side, recent arrivals of imported copper remained relatively limited, smelter shipments were broadly matched with downstream pick-up demand, and the market overall maintained a tight balance.

After the holiday, as holiday stockpiles are consumed, downstream processing enterprises may have some restocking demand, but finished product inventories are expected to accumulate during the holiday, and actual purchasing intensity will still depend on whether new orders after the holiday can significantly increase. Spot premiums are expected to remain in a deadlock between buyers and sellers around high levels after the holiday, and spot premiums may continue to stay high in the short term.

Going forward, attention should be paid to the extent of social inventory accumulation during the holiday, the recovery of downstream orders after the holiday, and the impact of changes in the backwardation spread between next-month and front-month contracts on spot premiums.

2) Guangdong

Purchasing sentiment was 1.6, down 1.6 from the previous trading day; selling sentiment was 2.02, down 0.59 from the previous trading day.

On September 30, Guangdong #1 copper cathode spot prices against the front-month contract:

• High-quality copper was quoted at a premium of 900 yuan/mt, flat from the previous trading day;
• Standard-quality copper was quoted at a premium of 600 yuan/mt, flat from the previous trading day;
• SX-EW copper was quoted at a premium of 540 yuan/mt, flat from the previous trading day.

The average price of Guangdong #1 copper cathode was 111,130 yuan/mt, up 490 yuan/mt from the previous trading day; the average price of SX-EW copper was 110,920 yuan/mt, up 490 yuan/mt from the previous trading day.

Overall, on the last trading day before the holiday, market trading was quiet, and spot premiums were flat from the previous day.

3) Imported copper

September 30:

• The average warrant price was $119/mt, flat from the previous trading day, with a price range of $110-128/mt;
• The average B/L price was 114 yuan/mt, flat from the previous trading day, with a price range of 104-124 yuan/mt;
• The average price of EQ copper (CIF B/L) was $53/mt, flat from the previous trading day, with a price range of $46-60/mt.

Quotes referenced cargoes arriving from late September to October.

4) Secondary copper

At 11:30 on September 30, the futures closing price was 110,370 yuan/mt, up 180 yuan/mt from the previous trading day; the average spot premium was 975 yuan/mt, down 75 yuan/mt MoM from the previous trading day.

Secondary copper prices rose 200 yuan/mt MoM; the sales sentiment index fell to 2.5, and the purchasing sentiment index fell to 1.97; the price difference between copper cathode and copper scrap was 3,931 yuan/mt, down 125 yuan/mt MoM; the price difference between copper cathode rod and secondary copper rod was 1,933 yuan/mt.

On the last trading day before the National Day holiday, both secondary copper rod enterprises and secondary copper traders were largely on holiday, with very little market activity.

IV. Inventory (September 30)

Social inventory in Shanghai stood at 49,200 mt, down 2,000 mt MoM; social inventory in Jiangsu stood at 12,700 mt, down 2,600 mt MoM.

V. Price Outlook

Macro:

The minutes of the US Fed's September meeting showed that officials were divided on the need for further rate hikes, but most expected one more hike within the year. Meanwhile, the New York Fed's survey showed that one-year inflation expectations in the US rose to 3.9%, a more than three-year high, pushing the US dollar index to 102.5 at one point and exerting some pressure on copper prices. Geopolitically, US-Iran nuclear talks remain deadlocked, with uranium enrichment rights the main obstacle, and uncertainty in the Middle East persists.

Fundamentals:

Supply side, domestic and imported cargoes continued to arrive at ports and enter the market, with spot supply gradually increasing. Demand side, as consumption gradually entered the traditional off-season, downstream enterprises maintained need-based purchasing.

Overall, copper prices are expected to stay high and move sideways today.

The information provided is for reference only and does not constitute direct investment advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients are not related to SMM.