The COMEX-LME copper price spread has continued to widen over the past two weeks, reaching approximately $400/t by late May and touching a recent high of $500/t. With the cross-market arbitrage window remaining open, traders have accelerated the cancellation of LME registered warrants and the transfer of material to the United States. LME copper inventory drawdowns have picked up pace, falling 3,375 tonnes on May 29th to 386,050 tonnes — a fresh 10-week low. Cancelled warrants currently account for 30.87% of total LME copper inventory, with more than half concentrated in US LME warehouses, reflecting clear intent to move metal. Meanwhile, COMEX copper inventories have continued to build to approximately 575,000 tonnes. According to SMM, CIF Shanghai COMEX registered bill-of-lading warrants

Driven by recovering risk appetite and China's peak demand season, copper prices both in China and abroad bottomed out since late March. However, as SHFE copper returned to the 100,000 level, the tug-of-war between longs and shorts increased, and futures prices shifted to range-bound consolidation. After the Labour Day holiday, copper prices quickly resumed their upward momentum. Today, prices opened higher with a gap and continued to rise, with SHFE copper just one step away from the record high set at the end of January, while LME copper hit a new closing high. What is fueling such strong confidence behind this rally? Deepening Ore-Side Vulnerability Intensifies Supply Disruption Concerns Since the suspension of First Quantum's Cobre Panama copper mine at the end of 2023, spot TC for copper concentrates in China has been caught in an endless downward spiral. Falling from around $80/dmt at the end of 2023, it largely dropped to single-digit levels and moved sideways in 2024. Entering 2025, it further plunged into negative territory, mainly due to successive production disruptions at world-class copper mines including Ivanhoe Mines' Kakula, Codelco's El Teniente, and Freeport's Grasberg mine in Indonesia. Entering 2026, global major copper ore supply growth remained limited, and the ore tightness showed no improvement. The latest data showed that spot TC for copper concentrates in China had fallen below -$90/dmt. With long-term contract TC at zero and spot TC declines accelerating, domestic smelters' production profits mainly relied on surging sulphuric acid prices and firm by-product prices of gold, silver, and other metals to compensate. It was reported that current sulphuric acid revenue could already cover smelters' procurement costs for copper concentrates and part of the processing costs, enabling domestic smelters to maintain relatively high operating rates, and the ore tightness had not yet notably transmitted to the smelting side. It is worth noting that sulphuric acid is not only a by-product of pyrometallurgy but also a core production material for SX-EW copper. For every 1 mt of copper produced, 5–6 mt of sulphuric acid is consumed. Sulphuric acid costs account for 40%–50% of total SX-EW copper production costs, and SX-EW copper production accounts for approximately 20% of global mine copper production. Since the beginning of this year, sulphuric acid prices surged sharply due to multiple factors, and ex-China sulphuric acid supply was periodically disrupted, raising concerns that copper supply in some countries could be affected. Focusing on the reasons behind the sulphuric acid price surge: on one hand, since the escalation of the Middle East conflict on February 28, shipping through the Strait of Hormuz has been broadly restricted and has recently faced a dual blockade by Iran and the US. Sulphur exports from the Middle East have been impacted, with the DRC and Zambia being the most concentrated SX-EW copper producing regions that are highly dependent on sulphur imports from the Middle East. As sulphur supply has been constrained, sulphuric acid prices have naturally risen in tandem, not only raising local SX-EW copper production costs but also potentially triggering further production cuts if the Strait of Hormuz blockade continues and sulphur disruption risks escalate. On the other hand, to prioritise domestic spring ploughing phosphate fertiliser production and support new energy industry expansion, China has imposed a phased ban on sulphuric acid exports according to industry sources. Chile has a relatively high dependence on Chinese sulphuric acid, with SX-EW copper accounting for around 20% of its output, and the market is also concerned that Chile's SX-EW copper production may be affected. In addition, against the backdrop of an already fragile copper ore supply, frequent news shocks from outside China recently have undoubtedly intensified market concerns. Last week, market rumours suggested that the full restart of Indonesia's Grasberg copper-gold mine, which declared force majeure in September last year, had been delayed by one year, driving SHFE copper sharply higher in the afternoon of 8 May. However, according to the latest update from Freeport-McMoRan, the company still expects Indonesia's Grasberg copper-gold mine to fully resume production by the end of 2027, reaffirming the plan outlined last month and refuting reports that production resumptions could be delayed to 2028. Furthermore, yesterday Peru declared an emergency energy decree due to a natural gas pipeline explosion. Peru's copper production reached 2.63 million mt in metal content last year, ranking third globally. Copper mining and smelting are relatively sensitive to power stability, and the market is concerned that Peru's energy strain may disrupt local copper supply. Overall, China's copper cathode production remains relatively stable, but some major global miners lowered their full-year production guidance in Q1, the ore tightness persists, sulphuric acid supply — a core raw material for ex-China SX-EW copper — is constrained, and there are multiple supply disruption themes on the copper supply side, which can easily boost copper prices once the macro front stabilises. Global Copper Visible Inventory Divergence: China Destocking Provides Support Last year, driven by the US government's threat to impose additional tariffs on imported copper, global copper continued to flow into the US, causing COMEX copper inventories to accumulate continuously while copper inventories in non-US regions remained low, providing sustained support for copper prices. In February this year, the US Supreme Court struck down most of the tariff measures introduced by the Trump administration in 2025. The Trump administration subsequently turned to Section 122 of the Trade Act of 1974 to push new global tariff policies. On 7 May, the US Court of International Trade issued a ruling stating that the legal basis for imposing a 10% global import tariff was invalid. The tug-of-war between US courts and the Trump administration over tariffs has continued recently, but the market has certain expectations that the US may subsequently impose additional tariffs on imported copper. Under such expectations, the price spread between COMEX copper and LME copper has shown a slight strengthening trend recently, meaning copper in LME warehouses still has the potential to flow to the US. Specifically, COMEX copper inventories have continued to rebound since mid-April, rising from around 590,000 mt to the latest 620,000 mt, again hitting a multi-year high. Correspondingly, LME copper inventories pulled back from around 400,000 mt in mid-April, declining to 397,700 mt on 6 May. They have rebounded with fluctuations recently, but overall inventories have not exceeded the over-12-year high set in mid-April. SHFE copper inventories fell for the eighth consecutive week, currently dropping to 181,300 mt, the lowest since the beginning of the year. Data source: Webstock Inc. Overall, on the macro front, there are currently disagreements in US-Iran negotiations, but both sides continue the ceasefire with no recent signs of escalation in conflict. Energy prices pulled back from late April levels, inflation concerns eased somewhat, the US dollar index was in the doldrums, and combined with the AI boom lifting global stock markets, market risk appetite was moderate, providing a fertile ground for copper prices to strengthen. Focusing on copper's own fundamentals, inventories outside China remained elevated, but significant prior destocking of China inventories provided support. The ore tightness was difficult to reverse, and supply-side narratives were abundant, meaning copper prices may still hold up well. However, it is worth noting that the Middle East situation remains the biggest macro variable, and the policy path following the Fed Chairman's power transition also deserves close attention. (Webstock Composite)

Since March 2025, COMEX copper cathode inventories have been building steadily from 83,876 tonnes, reaching a total of 537,540 tonnes as of February 11, 2026, representing an increase of over 450,000 tonnes in visible inventories over the past year.On February 12, 2026, inventories at the exchange recorded their first decline, falling by 1,225 tonnes to 535,715 tonnes.According to SMM market sources, COMEX registered warehouse capacity has been nearly saturated over the past year. Following the recent reversal in the LME–COMEX spread, there are signs that newly added inventories, as well as part of the existing stocks, may begin shifting toward the LME.

On February 12, COMEX copper inventories decreased by 2,011 short tons to 590,525 short tons.

SMM Morning Meeting Minutes: LME copper opened at $13,025/mt overnight, initially dipped to $12,975/mt, then fluctuated upward and touched a high of $13,228/mt near the close, finally settling at $13,185/mt, up 0.96%, with trading volume reaching 15,200 lots and open interest at 327,000 lots, an increase of 2,466 lots from the previous session, overall showing a pattern of bulls increasing positions. The most-traded SHFE copper contract 2603 opened at 101,740 yuan/mt overnight, touched a low of 101,280 yuan/mt at the beginning, then the center of copper prices gradually shifted upward and tested 102,500 yuan/mt, finally settling at 102,450 yuan/mt, up 0.93%, with trading volume reaching 41,800 lots and open interest at 165,000 lots, a decrease of 4,251 lots from the previous session, overall showing a pattern of bears reducing positions.

Today, the most-traded BC copper 2601 contract opened at 84,800 yuan/mt. It fluctuated downward at the start of the session, dipping to 84,090 yuan/mt, then fluctuated upward. After the daytime session opened, it moved sideways. Following the afternoon session opening, the center of copper prices gradually shifted higher, testing 86,790 yuan/mt, and finally settled at 85,960 yuan/mt, a gain of 2.02%. Open interest reached 3,277 lots, increasing by 45 lots from the previous trading day, while trading volume reached 1.05 lots. From a macro perspective, the US recorded its fastest GDP growth in two years for Q3, but the consumer confidence index declined for the fifth consecutive month. Bets on the US Fed cutting interest rates next year continued to heat up, boosting pressure on the US dollar, which fell below the 98 mark, providing a boost to copper prices. Meanwhile, COMEX copper inventories hit a record high, intensifying market concerns about tight supply in non-US regions and further fueling the rise in copper prices. On the fundamentals side, supply-wise, spot supply of copper cathode is currently ample, and suppliers are actively selling, but domestic and imported supply additions are limited. Social inventory in the Shanghai area increased only slightly, restricting the overall increase in available spot supply. Demand side, performance was weak; after copper prices broke through high levels, downstream purchasing sentiment remained bleak. The most-traded SHFE copper 2601 contract settled at 95,860 yuan/mt. Based on the BC copper 2601 contract price of 85,960 yuan/mt, its post-tax price is 97,134 yuan/mt. The price spread between the SHFE copper 2601 contract and BC copper was -1,274, maintaining an inverted spread which narrowed compared to the previous day.

SMM Morning Meeting Minutes: LME copper opened at $11,986.5/mt overnight, with its center rising to touch a high of $12,159.5/mt, breaking through $12,000/mt for the first time, then declining to touch a low of $11,961.5/mt, followed by a rangebound fluctuation with an upward center, ultimately closing at $12,055/mt, a gain of 1.21%. Trading volume increased by 10,400 lots to 26,000 lots, while open interest decreased by 2,837 lots to 342,000 lots. Overnight, the most-traded SHFE copper 2602 contract opened at 94,850 yuan/mt, touching a high of 95,180 yuan/mt at the start of trading, then the center of copper prices shifted downward, probing to 93,830 yuan/mt, and finally closed at 94,890 yuan/mt. Trading volume increased by 46,800 lots to 186,000 lots, while open interest rose by 5,200 lots to 246,000 lots.

Since recovering from the impact of global trade disputes in early April, SHFE copper has experienced low volatility, with futures prices fluctuating rangebound near the 79,000 level for an extended period. Recently, with the start of the US Fed's interest rate cut cycle, copper prices have shown signs of strengthening, and SHFE copper once broke above the 80,000 mark. However, high prices suppressed demand, and the key level was lost again, indicating a less solid foundation for the rally. Yesterday, supply disruption concerns suddenly intensified, driving both domestic and international copper prices higher. SHFE copper finally broke away from the low volatility pattern, decisively breaking through the trading range and hitting a nearly six-month high. How significant is the impact of this mine-side disruption? Will the strong momentum in copper prices continue? Grasberg Mine Disruption Escalates, Worsening Ore Tightness Yesterday, Freeport declared force majeure at the Indonesian Grasberg mine and lowered its copper and gold sales forecast, boosting domestic and international copper prices. Grasberg is the world's second-largest copper mine and has a high ore grade. With the transition from open-pit to underground mining, its copper production increased to around 800,000 mt in 2024, accounting for over 3% of global supply. Therefore, news of its production disruption has drawn significant market attention. This supply disruption incident traces back to the beginning of the month. On the evening of September 8 local time, a large-scale wet ore material inflow accident occurred in a production area of the Grasberg underground mine in Central Papua Province, Indonesia, disrupting access to some areas within the mine shaft and trapping seven contractor employees engaged in mine development work. To ensure the safe evacuation of workers, all mining operations at the Grasberg mine were suspended at that time. However, the market initially assessed the impact as likely short-term, and mid-month, an Indonesian mining official stated that a relatively small area of the copper mine was still operational. Consequently, earlier supply disruption concerns did not significantly intensify and failed to provide substantial momentum for copper price movements. However, yesterday's update from Freeport on the mud rush accident at the Grasberg Block Cave mine indicated that search and rescue efforts are ongoing. Although the incident occurred in the PB1C block, one of five production blocks, it caused damage to infrastructure supporting other production areas. Freeport Indonesia also lowered its consolidated sales guidance for Q3, with copper down 4%. Furthermore, a preliminary assessment suggests that, according to the current phased restart plan, the mine could potentially return to pre-incident operating rates by 2027. Freeport Indonesia's 2026 copper production target has been reduced by 35% compared to the pre-incident target. The development of the situation has clearly exceeded market expectations, significantly heightening concerns about ore tightness and driving a strong rally in copper prices. It is worth noting that this is not the first major copper mine disruption this year. In mid-May, the Kakula copper mine, owned by Ivanhoe Mines, was forced to close due to severe flooding triggered by an earthquake. In June, Ivanhoe Mines revised down its 2025 copper production guidance for the Kamoa-Kakula complex, the largest copper mine in Africa, by 28%. Apart from this, strikes, accidents, and other factors have caused disruptions in copper mines in traditional major supply countries like Chile and Peru, continuously exposing the vulnerability of copper ore supply. Against this backdrop, spot copper concentrate TCs in China turned negative this year and continued to weaken, currently hovering around -$40/dmt, indicating tight copper ore supply and demand and a significant increase in mine negotiation leverage. The escalation of the impact from the Grasberg mine accident is likely to intensify ore supply tightness, potentially leading to downward revisions in copper ore production growth expectations for this year and next. By year-end, domestic smelters may still lack initiative in next year's copper concentrate long-term contract TC negotiations. Copper Cathode Production Expected to Decline, Supply and Demand in a Tight Balance Copper ore supply tightness and extremely low TCs have long troubled the copper market. However, previously, thanks to supplements from other raw materials and profit compensation from by-products like sulphuric acid and gold, domestic smelters maintained relatively stable production pace, and copper cathode production remained high. Recently, however, new changes have emerged in the copper production chain. On one hand, supply of substitutes on the raw material side, such as copper anode, is becoming increasingly tight with a trend of further tightening. SMM data shows that the operating rate of smelters not using copper concentrates (using copper scrap or anode plates) was 59.9% in September, down 8.3 percentage points MoM. On the other hand, domestic sulphuric acid prices began to pull back from late August, leading to a decline in profits from these by-products, though the short-term decrease is limited, and further downside room needs monitoring. Currently, institutions predict a decline in China's copper cathode production in September based on production schedules, with a potential continued drop in October, indicating that ore tightness is starting to impact the smelting sector. Meanwhile, the Copper Branch of the China Nonferrous Metals Industry Association held a meeting yesterday, where the vice president emphasized that copper industry enterprises must resolutely oppose "involutionary" competition in the copper smelting sector. Amid the domestic anti-involution atmosphere, future attention should be paid to whether specific policies strictly controlling copper smelting capacity expansion will be introduced. After the implementation of US import copper tariffs with a narrower scope than expected, COMEX copper inventories continued to increase, rising by approximately 60,000 mt since the end of July. However, copper inventories in non-US regions have not accumulated persistently as previously feared. LME copper inventories briefly rebounded before pulling back again, with current levels not significantly different from late July. The accumulation of domestic copper social inventory has also been limited, below 30,000 mt, remaining at relatively low levels both year-on-year and within the year. September is the traditional peak season for metals in China. Influenced by copper prices fluctuating at highs around the 80,000 yuan mark, downstream demand has been somewhat constrained. Since the beginning of the month, spot copper premiums have continued to pull back, with limited improvement in end-use demand. As the National Day holiday approaches, downstream stockpiling sentiment remains relatively mediocre. The peak season performance is not robust but shows some resilience, hardly indicating a collapse. Data Source: Webstock Inc. Overall, on the external sentiment front, the US Fed cut interest rates slightly as expected in September, and is expected to implement two more rate cuts within the year. Overseas liquidity remains relatively loose, and the US dollar index continues to be under pressure. On the industrial front, the contradiction of copper ore supply tightness has begun to intensify, finally showing signs of transmission to the smelting side. Coupled with the domestic anti-involution atmosphere, concerns over tight supply are heating up. Meanwhile, demand shows some resilience, and the accumulation of global copper inventories is limited, making it difficult to cause significant additional drag in the short term. Recently, bullish factors have converged, with the macro front and the industrial side forming a resonance, allowing copper prices to break through previous resistance levels in one go. Currently, the copper market is dominated by strong optimism, and copper prices are expected to hold up well. However, after the bullish sentiment driven by recent news is largely digested, attention should still be paid to the implementation of production cuts on the smelting side. Caution is also warranted regarding the potential suppression of downstream demand by high prices after the peak season. (Comprehensive Report by Webstock)

The London Metal Exchange (LME) reported that LME copper inventories rebounded overall last week, with the latest inventory level reaching 158,900 mt, hitting a three-month high. The latest data from the Shanghai Futures Exchange showed that SHFE copper inventories edged down during the week ending August 29, with weekly inventories declining 2.39% to 79,748 mt. International copper inventories decreased by 427 mt to 12,428 mt. Last week, COMEX copper inventories continued to accumulate, with the latest inventory level reaching 277,843 mt, the highest since January 2004. Note: Generally, continuous inventory declines in domestic and overseas exchanges will support futures prices, while the opposite scenario exerts downward pressure. Comparison of Copper Inventories Across Three Major Exchanges Since 2023 The following shows copper inventory data from three major exchanges since August 2025 (unit: mt): (Wenhua Composite)

Data released by the London Metal Exchange (LME) showed that LME copper inventories continued to rebound last week, reaching a nearly two-year high. However, inventories declined this week, with the latest inventory level standing at 139,575 mt. The latest data released by the Shanghai Futures Exchange (SHFE) indicated that SHFE copper inventories continued to decline in the week ending August 1, with weekly inventories decreasing by 1.2% to 72,543 mt, hitting a new low in over seven months. International copper inventories decreased by 772 mt to 10,844 mt. Last week, COMEX copper inventories continued to increase, with the latest inventory level reaching 261,180 mt, the highest since February 2004. Note: Generally speaking, a continuous decline in inventories at domestic and overseas exchanges will support futures prices, while the opposite will have a bearish impact on futures prices. Comparison of Copper Inventories at Three Major Exchanges Since 2023 The following are copper inventory data at three major exchanges since July 2025 (unit: mt):