SMM Copper Morning Briefing | Oct 14, 2026, Wednesday

Overnight, both LME copper and SHFE copper closed lower, driven by increased short positions and reduced long positions respectively. US Fed officials expect one more rate hike before year-end, and with escalating strike risks at copper mines and rising crude oil prices, copper prices are under pressure in the short term. Prices are expected to consolidate with a slight upward bias today.

1. Overnight Futures

LME copper:

Opened at $14,645.5/mt, hit a high of $14,657/mt, a low of $14,549/mt, and closed at $14,555.5/mt, down 0.45%. Trading volume was 11,400 lots, with open interest at 264,000 lots, up 2,818 lots from the previous trading day, reflecting increased short positions.

Most-traded SHFE copper 2611 contract:

Opened at 110,950 yuan/mt, hit a high of 111,020 yuan/mt, a low of 110,610 yuan/mt, and closed at 110,730 yuan/mt, down 0.15%. Trading volume was 16,300 lots, with open interest at 195,000 lots, down 922 lots from the previous trading day, reflecting reduced long positions.

2. News

Data released by Chile customs showed that Chile's copper exports in September totaled 144,147 mt, of which 14,405 mt were shipped to China.

Chile's copper ore and concentrates exports in September totaled 925,599 mt, of which 580,781 mt were shipped to China.

3. Spot Market

1) Shanghai

Purchasing sentiment was 2.91, up 0.06 MoM; selling sentiment was 3.57, up 0.07 MoM.

On Oct 13, SMM #1 copper cathode spot prices against the SHFE copper 2610 contract were quoted at a discount of 60 yuan/mt to a premium of 100 yuan/mt, with an average premium of 20 yuan/mt, down 140 yuan/mt from the previous trading day.

In early trading, the SHFE copper 2610 contract opened lower with a gap and then swung wildly, bottoming out during the session. It opened near 111,450 yuan/mt, then dipped to around 111,390 yuan/mt before quickly rebounding to near 111,610 yuan/mt. Copper prices then fell under pressure again, hitting an intraday low of around 111,270 yuan/mt. After consolidating at lows, prices gradually rebounded, with a rapid rally near midday, closing the morning session at 111,500 yuan/mt.

The backwardation spread between the front and next month contracts was between 710 and 820 yuan/mt; the import profit margin for SHFE copper against the 2610 contract was between a loss of 1,260 and 1,110 yuan/mt.

As delivery approaches, the backwardation spread between SHFE copper front and next month contracts has shown signs of marginal convergence, but remains at a relatively high level overall, and suppliers still show willingness to sell. After spot premiums quickly pulled back to near parity during the day, some suppliers became less willing to continue selling at low prices, with sentiment to hold prices firm and hold back from selling gradually emerging. Further downside for spot premiums may be limited.

As of midday, open interest in the SHFE copper 2610 contract stood at around 20,000 lots, with SHFE warrants at approximately 9,000 mt. With delivery approaching, attention should remain on risks of market fluctuations arising from changes in nearby open interest, warrant volumes, and the price spread between front-month and next-month futures contracts.

Demand side, downstream processing enterprises remain primarily in a wait-and-see mode, making just-in-time procurement with limited willingness to chase higher prices. Overall, if the backwardation between front-month and next-month contracts continues to narrow, pressure on the spot side may ease somewhat. Spot premiums in Shanghai are expected to stop falling and stabilize tomorrow, with a possibility of a slight rebound.

2) Guangdong

Procurement sentiment was 2.53, down 0.2 from the previous trading day; sales sentiment was 2.75, down 0.24 from the previous trading day.

On October 13, spot prices of #1 copper cathode in Guangdong against the front-month contract:

• High-quality copper was quoted at a premium of 250 yuan/mt, down 100 yuan/mt from the previous trading day;
• Standard-quality copper was quoted at a discount of 50 yuan/mt, down 100 yuan/mt from the previous trading day;
• SX-EW copper was quoted at a discount of 110 yuan/mt, down 100 yuan/mt from the previous trading day.

The average price of #1 copper cathode in Guangdong was 111,490 yuan/mt, down 455 yuan/mt from the previous trading day; the average price of SX-EW copper was 111,280 yuan/mt, down 455 yuan/mt from the previous trading day.

Overall, with a wide price spread between futures contracts, downstream buyers were reluctant to purchase, premiums moved lower, and transactions were lackluster.

3) Imported copper

October 13:

• The average warrant price was $126/mt, down $4/mt from the previous trading day, with a price range of $116-136/mt;
• The average B/L price was 125 yuan/mt, unchanged from the previous trading day, with a price range of 120-130 yuan/mt;
• The average price of EQ copper (CIF B/L) was $60/mt, down $1/mt from the previous trading day, with a price range of $55-65/mt.

Quotations were based on cargoes arriving from October to early November.

4) Secondary copper

At 11:30 on October 13, the futures closing price was 111,500 yuan/mt, down 240 yuan/mt from the previous trading day; the average spot premium was 20 yuan/mt, down 140 yuan/mt MoM from the previous trading day.

Prices of copper scrap remained unchanged MoM; the sales sentiment index rose to 2.58, and the procurement sentiment index rose to 2.06; the price difference between copper cathode and copper scrap was 3,474 yuan/mt, down 380 yuan/mt MoM; the price difference between copper cathode rod and secondary copper rod was 820 yuan/mt.

According to an SMM survey, as the price spread between copper futures contracts widened, many secondary copper rod enterprises significantly reduced their spot procurement demand and preferred to have copper scrap traders hold inventory on consignment, with pricing and settlement to be finalized after contract rollover.

However, copper scrap traders were not entirely willing to hold inventory on consignment, with most transactions settled in cash on a spot basis and only a small portion handled through consignment. Therefore, transactions in the copper scrap market were mixed, with overall trading volumes remaining low.

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:

US Fed officials Williams and Collins both expect one more rate hike before year-end, while Waller said Trump poses a threat to the Fed's independence but has not succeeded so far. Labor tensions at Chile's largest copper mine escalated, with over 1,000 employees potentially striking on Wednesday. Trump said the Houthis may be deliberately pushing up oil prices ahead of the midterm elections and may ask Turkey to join operations against the Houthis; crude oil closed higher, and copper prices were under pressure.

Fundamentals:

Supply side, overall willingness to sell remained, but willingness to sell at low prices weakened notably, with sentiment to hold back from selling intensifying, marginally easing supply-side pressure. Demand side, downstream processing enterprises mainly adopted a wait-and-see approach and made just-in-time procurement, with limited willingness to chase higher prices, leaving overall demand sluggish.

Overall, copper prices are expected to consolidate and drift higher in a narrow range today.

The information provided is for reference only and does not constitute direct investment research 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.