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In futures trading on 2026-09-02, the main Shanghai copper contract opened at 108,500 yuan per tonne and settled at 108,040 yuan per tonne, down 1.08% from the previous close. During overnight trading, the contract opened at 108,500 yuan per tonne and closed at 108,390 yuan per tonne, up 0.26% from the afternoon close of the prior day session.

Physical Market Overview

According to SMM data, the premium for spot SMM #1 electrolytic copper over the SHFE 2609 contract ranged between 300-450 yuan per tonne, with an average of 375 yuan per tonne, down 120 yuan from the prior session. The SHFE copper contract for September delivery dipped to a low of 108,150 yuan per tonne before recovering, trading in a 108,350-108,500 yuan range, closing the morning session at 108,440 yuan. The back-month spread widened to 550-670 yuan per tonne, while the import profit window remained closed with losses of 690-790 yuan per tonne for the prompt month. In Shanghai, selling sentiment stood at 3.41 and buying sentiment at 3.06, as holders successively reduced premiums across brands to boost sales. Lower copper prices attracted some end-user buying on a need basis, with transactions picking up modestly, though buyers showed weak willingness to chase higher prices and preferred cheaper sources. The widening back spread raised holders' rollover costs, increasing the urge to sell physical copper and pressuring premiums. Premiums are expected to face mild downward pressure today, though demand is improving marginally and low-priced cargoes are trading adequately, limiting the scope for a sharp premium correction.

Key Macro and Industry Updates

The Federal Reserve's Beige Book indicated modest growth in US economic activity since early July, with 10 of 12 districts reporting slight to modest expansion and two districts unchanged. Consumer spending rose slightly, but price sensitivity increased, while high-end consumption stayed robust. Auto sales were sluggish due to weak confidence, high fuel prices, and rising financing costs. Manufacturing improved across most regions, with some areas citing strong defense and data center-related orders. Job growth slowed, with only slight overall gains; labor demand remained solid in manufacturing and construction, but declined in retail and hospitality. Most districts reported moderate price increases, with cost pressures persisting from energy, transportation, raw materials, and tariffs. Businesses held a broadly positive outlook but remained watchful of energy prices, policy shifts, and international conflicts.

On the geopolitical front, former President Trump stated that a new round of strikes against Iran would not last long and signaled readiness for another attack, maintaining a hawkish tone. In mining news, on September 1, the Wutong Copper Phase III expansion project, a key provincial construction initiative in Jiangxi, held its commissioning ceremony. Construction began on July 6, 2021, with the main project completed on schedule in December 2025, entering full trial production at 8,000 tonnes per day in January of this year, and achieving a 10,000-tonne mining and processing capacity by end of June. Once fully operational, Wutong will become the largest underground copper mine in the province and rank among the top five in China. The expanded project has a design capacity of 10,000 tonnes of ore daily and a service life of 24 years. Additionally, according to external reports on September 1, two sources said India and Zambia have restarted negotiations on investment opportunities in copper and other critical minerals. Preliminary discussions were held on August 26 between Indian mining ministry officials and Zambian counterparts, without addressing stalled projects that had previously halted talks. Earlier negotiations broke down over Zambia's failure to provide guarantees for mining rights in a 9,000-square-kilometer area awarded to India last year. Khanij Bidesh India Ltd, India's primary overseas critical minerals procurement entity, is simultaneously advancing investment assessments in Australia, Brazil, Canada, Russia, and Indonesia, and negotiating projects in Malawi. India, the world's second-largest refined copper buyer, has seen imports surge since the closure of Vedanta's Sterlite smelter in 2018, with the government projecting a potential 91-97% dependence on copper concentrate imports by 2047. Meanwhile, London-listed ACG Metals announced that its Gediktepe mine in Turkey produced its first batch of copper concentrate on August 31, marking the company's transition from precious metals and zinc to copper production, with a target of full commissioning by end-2026.

Smelting and Import Data

According to Shanghai Metals Market on August 31, Chile's National Statistics Institute reported a 9.4% year-on-year drop in July copper production to 403,424 tonnes, down from 445,322 tonnes a year earlier, due to severe storms affecting mining operations. The institute attributed the decline in mining and processing to "unfavorable weather conditions in the northern part of the country, which hindered normal production processes," and added that major mines in key areas also underwent maintenance during July.

Demand and Inventory Assessment

End-use demand has yet to show a substantive seasonal rebound, marking a typical transition from off-season to peak season. Downstream sectors such as wire and cable and enameled wire are relying on existing backlog orders, with new orders suppressed by high copper prices. Companies generally adopt a just-in-time procurement, cautious restocking approach, showing little willingness to build inventory. Though the scrap-copper premium has widened periodically, substitution of refined copper by scrap remains constrained due to tax invoice costs for recycled copper, limiting order growth for recycled-rod producers. The high-price spread benefit is flowing more to refined copper rods. Production resumption at major processing plants in Guangdong has boosted regional warehouse withdrawals, but nationwide end-consumption improvement remains limited. Domestic inventory declines are mainly driven by insufficient supply-side replenishment rather than a broad consumption uptick. Looking ahead to next week, the traditional "Golden September" begins, but high copper prices remain the biggest constraint for end-users. Large-scale concentrated restocking is unlikely in the short term, with terminal buyers expected to maintain need-based purchasing. Key focus points include grid investment, new energy supply chain order implementation, and whether copper price declines can stimulate downstream restocking. If prices stay elevated, peak-season demand realization will be further delayed. Also, watch the impact of invoice costs on recycled copper terminals. Regarding inventories and warrants, LME warrants rose 350 tonnes to 233,850 tonnes, while SHFE warrants fell 249 tonnes to 29,517 tonnes. As of August 31, domestic electrolytic copper spot inventory stood at 102,100 tonnes, down 7,400 tonnes from the prior week.

Strategy Recommendation

Base view: cautiously bullish. Last week, the Jackson Hole symposium delivered a hawkish signal, with US inflation stickiness resurfacing and fueling rate-hike expectations. Copper prices were volatile on macro news—rising then falling before recovering at week's end. Domestically, low inventories supported elevated spot premiums, but the "Golden September" end-demand has yet to kick in substantively, with downstream buyers on need-based purchasing. Scrap copper substitution is limited due to tax invoice constraints. Copper concentrate TC remains in negative territory, reflecting tight raw material supply. This week, macro factors remain the key price driver, with US non-farm payroll data and domestic peak-season demand progress as focal points. Operational advice: maintain buy-on-dips hedging, with the recommended buying range of 107,400-107,900 yuan per tonne. Arbitrage: stand aside. Options: sell puts. Key risks include a rapid TC rebound and overseas liquidity shocks. Investment advisory qualification: China Securities Regulatory Commission permit [2011] No. 1289. Disclaimer: This report is based on public information believed reliable by the company, but no warranty is given on its accuracy or completeness. The opinions, conclusions, and forecasts herein reflect only the views as of the report's date and may change without notice. The report is for reference only and does not constitute investment advice. The company and authors assume no liability for any losses incurred from its use. All rights reserved by Hua泰 Futures Research Institute. Reproduction, distribution, or citation without prior written consent is prohibited; permitted citations must credit the source and remain faithful to the original. All trademarks used belong to their respective owners. Copyright reserved by Hua泰 Futures Co., Ltd. Open a futures account with Hua泰—professional and trustworthy.