[SMM Copper Cathode Rod Flash] The trade structure has seen a significant change. In H1 2026, the proportion of exports under processing trade with imported materials pulled back to 57.76%, while the share of processing trade with supplied materials rose to 32.93%. Compared to the same period last year, when it heavily relied on processing trade with imported materials, the situation has improved significantly. The changing characteristics of export orders have prompted enterprises' order-taking modes to become more diversified.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the SHFE copper 2608 contract rose further during the night session, basically trading between 106,000 yuan/mt and 106,800 yuan/mt. With the recent synchronized increase in copper prices and spot premiums, while the SHFE contract structure maintains a backwardation structure, downstream purchase willingness has weakened significantly, with transactions mainly driven by rigid demand. According to SMM, affected by high copper prices and accumulated finished product inventories, some downstream processing enterprises plan to cut production or temporarily halt operations. The impact of weakening end-use consumption on the spot market is gradually becoming evident. In terms of supplier behavior, intraday selling drove the premium center lower. Overall, under the combined effect of high copper prices and premiums suppressing downstream demand, along with increased willingness to sell among suppliers, it is expected that spot copper quotations in Shanghai against the 2608 contract will maintain a premium tomorrow, with the overall center likely to edge down slightly.

According to the latest data from the General Administration of Customs, in June 2026, China imported 210,900 mt in physical content of copper scrap and shredded copper scrap, up 10.43% MoM and up 15.11% YoY. In January-June 2026, cumulative imports reached 1.2415 million mt in physical content, up 8.39% YoY.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, SMM recorded social inventory in Shanghai at 66,100 mt, down 10,400 mt WoW from last Thursday, while Jiangsu recorded 19,600 mt, up 100 mt WoW from last Thursday. Available spot supply remains tight, hovering at a low for the year, with the destocking trend unchanged, pushing the center of spot premiums higher and hitting a new high for the year. Meanwhile, the spot price spread between Shanghai and Guangdong widened further, opening the window for cross-regional shipments. According to SMM, some suppliers have already initiated cargo transfers from Guangdong to Shanghai, with the shipped copper cathode expected to arrive in the Shanghai market this week. If arrivals are substantial, this could provide marginal relief to the current tight spot market. However, given the limited scale of near-term arrivals and the fact that absolute inventory levels remain low, the downward pressure on premiums is expected to be relatively limited. On balance, with tightness in available supply persisting in the near term, spot prices against the SHFE copper 2608 contract are expected to remain at a premium tomorrow.

[SMM Shanghai spot copper] Tomorrow, the currently available spot copper remains tight, at a year-to-date low, and the inventory destocking trend remains unchanged. Moreover, the backwardation structure has widened. Intraday, suppliers continued to raise their quotes, showing a strong willingness to hold prices firm. Overall, under the combined influence of tight available supply, suppliers holding prices firm, and downstream just-in-time procurement, SHFE copper spot prices against the 2608 contract next Monday are expected to maintain a premium, with the overall premium center continuing to rise.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the current social inventory continues to destock rapidly. SMM data shows that Shanghai's social inventory recorded 76,500 mt, down 9,100 mt MoM; Jiangsu's social inventory recorded 19,500 mt, down 6,900 mt MoM, with available spot cargoes remaining persistently tight. From the perspective of supplier behavior, after low-priced cargoes were quickly digested, the market found it difficult to locate discounted cargoes, and suppliers held firm in their intention to support prices. High-quality copper premiums were maintained at a high of 360-400 yuan/mt. After the contract rollover, the backwardation spread between the front-month and next-month contracts narrowed but still stayed at a relatively high level. Overall, with inventory continuing to destock and limited replenishment arrivals, Shanghai spot copper prices against the SHFE 2608 contract are expected to remain at a premium tomorrow, with the overall center possibly moving slightly higher.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the open interest for the SHFE copper 2607 contract is currently less than 2,000 lots, and the 2607 contract maintains a high backwardation against the 2608 contract. After the contract rollover, the market will officially price around the 2608 contract. Supply side, social inventory has been continuously declining recently. Arrivals of domestic and imported materials at some warehouses have been low, and the tightness of available spot supply is unlikely to ease significantly in the short term. LME data shows that the ratio of cancelled warrants on the LME has been rising continuously; coupled with the opening of the import window, subsequent import supply growth is expected to see some improvement. According to SMM, some warrants have been cancelled from LME and shipped to the Chinese market, expected to arrive at the end of this month or early next month. Demand side, downstream buyers' acceptance of high premiums is limited, market transactions are light, and suppliers have been continuously lowering their offers to secure deals. Since SMM always quotes against the front-month contract, spot premiums have been rapidly recovering due to the backwardation structure. Overall, with the support of the backwardation structure and weakening downstream consumption, Shanghai spot copper premiums against the 2608 contract are expected to remain at a premium tomorrow.

This week (July 6 – July 9), the weekly average price range for Yangshan copper premium B/L transactions was $73–$87/mt, QP August, with an average price of $80/mt; the weekly average price range for warrant transactions was $74–$85/mt, QP August, with an average price of $80/mt; and EQ copper CIF B/L was at $43–$54/mt, QP August, with an average price of $49/mt. As of July 9, the forex-adjusted SHFE/LME copper price ratio for the SHFE copper 2607 contract against LME copper was 1.1406, with an import profit near 200.22 yuan/mt, compared to a loss of 163.35 yuan/mt in the previous period, with the arbitrage window open. As of Thursday, the front-end contango structure of LME copper widened, with the carry spread between the July date and August date at −$42.98/mt. Currently, mainstream offers for high-quality ER copper warrants are around $90–$100/mt, and mainstream offers for B/L are around $90–$100/mt; CIF B/L EQ copper traded around $50–$60/mt. This week, Yangshan copper premiums showed a rapid uptrend. The logic remained: low port arrivals from July to August led to persistently tight supply, giving suppliers strong sentiment to hold back from selling and hold prices firm, significantly lifting market offers and transaction centers. On the SHFE/LME price ratio side, the import price ratio swung from a loss to a profit, and downstream restocking actions occurred due to a typhoon. However, the rapid rise in premiums has caused current divergence between upstream and downstream players. Overall, limited available cargo, tight supply, and an open arbitrage window were the core drivers of this round's premium rise. According to the SMM survey, as of Thursday this week (July 9), China's bonded zone copper inventory decreased by about 4,400 mt MoM from the previous period (July 2) to 35,300 mt. Inventory in the Shanghai bonded zone was down 3,900 mt MoM to 31,900 mt, and in the Guangdong bonded zone, it was down 500 mt MoM to 3,400 mt. Bonded zone inventory destocked for a third consecutive week, consistent with shrinking port arrivals and tightening available cargo; the destocking pace widened from last week (a 1,300 mt decline), mainly due to low restocking into the bonded zone. Looking ahead, the pattern of tight arrivals from July to August continues to materialize, and supply-side support for premiums is likely to persist. Coupled with a rising import price ratio and a far-end shift to a backwardation structure, this is expected to continue giving suppliers confidence to hold prices firm. However, attention should be paid to whether current downstream actual consumption demand can support the sustained rise in premiums.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the impact of Typhoon Bavi is expected to continue intensifying. Downstream copper processing enterprises are showing strong buying enthusiasm, with some stockpiling in advance over concerns of logistics disruptions, providing solid demand-side support. Supplier behavior: after low-priced spot cargoes were quickly absorbed during the day, available spot supply remains tight, and suppliers’ sentiment of holding back from selling is strong. Some suppliers are holding cargoes in anticipation of higher prices, waiting to sell at elevated levels, further pushing up spot premiums. Import profit margin is near breakeven, but short-term supply from outside China is limited. In summary, spot prices against the SHFE copper 2607 contract are expected to maintain a premium tomorrow, with the overall trend remaining strong. Going forward, attention should be paid to the actual typhoon path and the sustainability of downstream stockpiling.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, SMM records Shanghai social inventory at 122,400 mt, down 4,100 mt WoW, and Jiangsu social inventory at 36,000 mt, down 200 mt WoW. Consecutive destocking pushed the center of Shanghai spot copper premiums higher. The tight supply-side pattern remains unchanged, lending strong support to spot premiums. After low-priced supply was quickly absorbed during the day, available spot cargoes in the market turned tight, and suppliers were resolute in holding prices firm. Overall, driven by inventory destocking, suppliers' firm pricing, and downstream demand resilience, Shanghai spot copper prices against the 2607 contract are expected to stay at a premium tomorrow, with the overall center possibly edging up slightly.