High copper prices, ample supply, weak demand, inventory buildup, weak structure ↓ Falling copper prices, still ample supply, good demand, destocking, slightly stronger structure ↓ Fluctuating copper prices, relatively tight supply, demand fluctuating with copper prices, high probability of destocking, high probability of strengthening structure Q1 2026 has ended, and April trading days are also about to end. The above two sentences summarize SHFE copper futures and spot market performance. Note that this refers only to copper cathode supply, as China saw significant production increases in 2025. Despite continued ore tightness, production in 2026 has also remained fluctuating at highs, keeping copper cathode supply persistently ample. Demand side, although annual demand showed growth, when broken down to monthly or even daily levels, demand was significantly influenced by copper prices. Amid copper price fluctuations, secondary copper was the "active player" — when copper prices were high, secondary copper shipments increased, benefiting both supply and demand sides; when copper prices fell, secondary copper shipments decreased, reducing some raw material supply for both supply and demand. So recently the spot market appeared to have tight supply. Smelters began shifting to "high prices with high volumes" in shipments. Against the backdrop of continued destocking and concentrated smelter maintenance, can premiums "heat up"? The chart above shows that from a macro perspective, copper prices and Shanghai spot copper premiums exhibited a clear inverse correlation in recent years. However, from a detailed perspective, Shanghai spot copper premiums have recently shown signs of "picking up" under high copper prices. 1. Although inventory continued destocking, the current warrant-to-inventory ratio remained elevated (this indicator is highly correlated with structure). The SHFE copper near-month structure has not shown a sustained backwardation structure to provide guidance for future premiums. 2. Although copper prices returned to highs, overall secondary copper shipment sentiment remained subdued, providing limited supplementation to copper cathode production and consumption. Previously, the price difference between primary metal and scrap was inverted, which favored copper cathode consumption. During this process, non-registered supply supplementation was limited, and the price spread between non-registered and SX-EW copper also narrowed. Imported copper supplementation within the year decreased YoY compared to previous years. Taking DRC as an example, non-registered supply was also diverted. Overall, substitutes for registered copper cathode decreased. 3. Copper cathode supply itself is about to decrease in the coming months, with concentrated maintenance currently underway in the market. Social inventory is expected to further decline. As inventory decreases and the warrant-to-inventory ratio declines, the far-month structure has already shifted to backwardation. China's spot premiums are also expected to pick up in the near term. It has been observed that Guangdong spot premiums have been consistently higher than other regions nationwide for several consecutive days. Downstream buyers in Jiangsu, Zhejiang, Shanghai, and Anhui have recently tended to purchase from direct producers and traders with inventory who can issue invoices for the current month. Shanghai spot copper premiums are expected to see a small spike before the Labour Day holiday. After the holiday, as domestic supply decreases, premiums are expected to gradually firm up. However, the warrant-to-inventory ratio remains relatively high, and a sustained shift to backwardation in the structure still requires patience.

SHFE issued a notice on April 27 regarding work arrangements during the 2026 Labor Day holiday. The original text is as follows: Notice on Work Arrangements During the 2026 Labor Day Holiday To all relevant entities: In accordance with the "Announcement of Shanghai Futures Exchange on Market Closure Arrangements for 2026" (SHFE Announcement [2025] No. 157), the work arrangements during the Labor Day holiday are as follows: 1. No night session trading will be conducted on the evening of April 30, 2026 (Thursday). The market will be closed from May 1, 2026 (Friday) to May 5, 2026 (Tuesday). On May 6, 2026 (Wednesday), call auction for all futures and options contracts will be held from 08:55 to 09:00, and night session trading will resume that evening. 2. Effective from the closing settlement on April 29, 2026 (Wednesday), the price limit ranges and trading margin ratios will be adjusted as follows: For copper futures cu2703 and cu2704, aluminum futures al2703 and al2704, zinc futures zn2703 and zn2704, lead futures pb2703 and pb2704, and alumina futures ao2703 and ao2704 contracts: the price limit range is 10%, the hedging open interest trading margin ratio is 11%, and the general open interest trading margin ratio is 12%. For cast aluminum alloy futures ad2703 and ad2704, wire rod futures wr2703 and wr2704, and stainless steel futures ss2703 and ss2704 contracts: the price limit range is 8%, the hedging open interest trading margin ratio is 9%, and the general open interest trading margin ratio is 10%. For rebar futures rb2703 and rb2704, and hot-rolled coil futures hc2703 and hc2704 contracts: the price limit range is 7%, the hedging open interest trading margin ratio is 8%, and the general open interest trading margin ratio is 9%. For nickel futures ni2704 and tin futures sn2704 contracts: the price limit range is 12%, the hedging open interest trading margin ratio is 13%, and the general open interest trading margin ratio is 14%. For natural rubber futures ru2704 contract: the price limit range is 9%, the hedging open interest trading margin ratio is 10%, and the general open interest trading margin ratio is 11%. For pulp futures sp2704 and offset printing paper futures op2704 contracts: the price limit range is 7%, the hedging open interest trading margin ratio is 8%, and the general open interest trading margin ratio is 9%. In the event of circumstances stipulated in Article 13 of the "Risk Management Measures of Shanghai Futures Exchange," adjustments will be made based on the above price limit ranges and trading margin ratios. 3. After trading on May 6, 2026 (Wednesday), effective from the closing settlement on the first trading day without a limit-up or limit-down move, the price limit ranges and trading margin ratios will be adjusted as follows: The price limit ranges and trading margin ratios for the above futures contracts will be restored to their original levels. Other matters concerning price limits and trading margins shall be handled in accordance with the "Risk Management Measures of Shanghai Futures Exchange" and related business rules. All relevant entities are requested to take proper risk prevention measures to ensure market stability and smooth delivery. This notice is hereby given. Attachment: Shanghai Futures Exchange Apr 2026

Today, the most-traded BC copper 2605 contract opened at 88,200 yuan/mt, touched a high of 88,630 yuan/mt, and then copper prices' center kept declining. At the start of the daytime session, it touched a low of 87,410 yuan/mt, and after the afternoon session opened, the center rose, ultimately closing at 88,510 yuan/mt, up 1.37%. Open interest stood at 6,515 lots, down 33 lots from the previous trading day, and trading volume reached 3,879 lots, up 985 lots from the previous trading day. On the macro front, Trump announced a blockade of the Strait of Hormuz, interception of oil revenues linked to Iran, and threatened to clear Iranian mines; Iran allowed non-military vessels to pass but rejected three major US demands including "equal sharing of strait interests." Diplomatic channels between the two sides have not yet been closed. The Middle East situation continued to evolve, and market reactions to geopolitical tensions turned mediocre. Fundamentals side, supply side, arrivals of domestic sources decreased somewhat, while imported sources maintained stable arrivals, and the supply landscape tightened somewhat. Demand side, downstream buyers still primarily made just-in-time procurement, and overall consumption slowed down slightly compared with the previous period. As of Monday, April 13, SMM copper inventories in mainstream regions nationwide decreased 12.52% WoW from the previous Monday, marking five consecutive weeks of destocking, providing momentum for copper prices to rise. The SHFE copper 2605 contract closed at 99,610 yuan/mt. Based on the BC copper 2605 contract price of 88,510 yuan/mt, its after-tax price was 100,016 yuan/mt. The price spread between the SHFE copper 2605 contract and BC copper was -406 yuan/mt, showing an inversion that widened from the previous day.

【SMM Copper News Flash】According to SHFE data, a total of 6,258 mt of copper futures warrants flowed out today, of which the Shanghai region saw the largest outflow of 4,398 mt. It is worth noting that the Shanghai region has shifted from spot discounts to spot premiums.

[SMM Copper Futures Alert] Intraday copper futures edged up nearly 1%, returning to a near 4-week high. LME copper rebounded above $12,700/mt, and SHFE copper moved back above 98,500 yuan/mt.

Copper futures trading volume dropped sharply, signaling reduced participation and cautious sentiment.

The operating rate of secondary copper rod in March 2026 was 14.25%, below the expected 16.26%, up 6.27 percentage points MoM and down 25.93 percentage points YoY. In March, China's secondary copper rod market struggled under multiple pressures including wild swings in copper prices, deepening industrial fiscal and tax policy reforms, and structural tightness in raw material supply, failing to exhibit the traditional seasonal recovery

[SMM Copper Flash News] During the day, copper futures warrants continued to flow out by 7,475 mt, including 2,745 mt from Shanghai, 4,129 mt from Guangdong, and 601 mt from Jiangsu. At present, spot discounts for copper cathode in Shanghai and Jiangsu have narrowed, while in Guangdong, quotes were firmer due to continued destocking.

Copper futures trading volumes on COMEX have rebounded to over 73,000 contracts, with open interest slightly increasing, indicating renewed market participation amid ongoing volatility.

[SMM Copper Bulletin] According to the SHFE daily copper warrant report, copper futures warrants continued to flow out by 8,368 mt during the day, with the most significant outflows in Shanghai at 3,640 mt, followed by Guangdong at 2,926 mt and Jiangsu at 1,902 mt. As social inventories continued destocking, spot premiums in various regions basically stopped falling and rebounded.