1. LME Copper Was on Holiday SHFE Copper Rose Sharply Towards 80000 Yuan/mt

Futures: LME copper was closed overnight. The most-traded SHFE copper contract 2510 opened and touched a low of 79,600 yuan/mt overnight, hit a high of 79,810 yuan/mt at the beginning of the session, then fluctuated rangebound and finally closed at 79,640 yuan/mt, up 0.44%. Trading volume was 20,000 lots, and open interest was 173,000 lots.
[SMM Copper Morning Meeting Minutes] News: (1) Codelco said on Sunday that Chile's mining regulator Sernageomin has approved the resumption of production at the Andes Norte and Diamante sections of the El Teniente copper mine after an accident on July 31 suspended operations.
Spot: (1) Shanghai: On August 25, #1 copper cathode spot prices against the front-month 2509 contract were reported at a premium of 80-220 yuan/mt, with the average premium at 140 yuan/mt, down 10 yuan/mt from the previous trading day.  #1 copper cathode prices were 79,270-79,520 yuan/mt. Fed Chairman Powell's speech at the Jackson Hole central bank symposium strengthened market expectations for a September interest rate cut. The US dollar fell below the 98 level, and copper prices rose accordingly. The SHFE copper 2509 contract showed strength in the morning session, hovering around 79,220 yuan/mt, and surged to 79,480 yuan/mt around 11:00 before closing the morning session at 79,390 yuan/mt. The price spread between front-month and next-month contracts was almost flat, while the far-month contracts still showed a backwardation structure. After the market shifted to trading cargoes with invoices dated next month, activity is expected to decline. Maintenance at northern smelters has reduced shipments to Shanghai, and with limited domestic supply, spot premiums for SHFE copper are expected to remain firm.
(2) Guangdong: On August 25, spot prices of #1 copper cathode in Guangdong against the front-month contract were at a premium of 30-90 yuan/mt, with the average premium at 60 yuan/mt, flat from the previous trading day. SX-EW copper was reported at a discount of 40-20 yuan/mt, with the average discount at 30 yuan/mt, flat from the previous trading day. The average price of #1 copper cathode in Guangdong was 79,255 yuan/mt, up 520 yuan/mt from the previous trading day, while the average price of SX-EW copper was 79,165 yuan/mt, up 520 yuan/mt. Overall, inventory fell for the fifth consecutive day, and suppliers intended to refuse to budge on prices, but actual transactions were moderate, and overall trading was weaker than last Friday.
(3) Imported copper: On August 25, warrant prices were $45-57/mt, QP August, with the average price flat from the previous trading day. B/L prices were $50-68/mt, QP September, with the average price flat from the previous trading day. EQ copper (CIF B/L) was $24-34/mt, QP September, with the average price up $1/mt from the previous trading day. Quotations referred to cargoes arriving in late August and mid-to-early September. LME copper was closed yesterday, and few traders offered.
(4) Secondary copper: On August 25, prices of recycled copper raw materials rose 200 yuan/mt MoM. The price of bare bright copper in Guangdong was 73,200-73,400 yuan/mt, up 200 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap was 1,551 yuan/mt, up 467 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 970 yuan/mt. According to the survey, the impact of policies continues to spread. A secondary copper rod enterprise in Anhui said that if the policy cannot be implemented by September, it will choose to temporarily suspend production. Currently, only enterprises in Jiangxi and Anhui have clearly stated they will suspend production, while enterprises in other regions are maintaining normal production or reducing operating rates. According to SMM estimates, due to enterprise suspensions, national secondary copper rod production in August fell by about 30%, a reduction of 48,800 mt.
(5) Inventory: On August 21, LME copper cathode inventories decreased by 375 mt to 155,975 mt; on August 25, SHFE warrant inventories decreased by 401 mt to 23,747 mt.
Price: On the macro front, oil prices climbed about 2% on Monday, extending last week's gains, as the market anticipated more US sanctions on Russian oil and potential supply disruptions from Ukrainian attacks on Russian energy infrastructure, with copper prices following the upward trend. Supply side, imported copper cathode arrivals are expected to be limited, while domestic copper cathode supply is gradually being replenished in small amounts; total supply is expected to increase slightly WoW. Demand side, due to month-end funding pressure coupled with copper prices fluctuating at highs, downstream purchase willingness was suppressed. As of Monday, August 25, national mainstream copper inventories decreased by 9,000 mt WoW to 123,000 mt. Price side, the market is currently digesting Powell's remarks, and the US dollar rebounding from lows is limiting copper price gains. Attention should be paid to speeches by US Fed officials later today to see if they hold the same policy views as Powell. Overall, with the US dollar strengthening, copper prices are expected to have limited upside today.

2.Multiple Factors Support Intraday Surge in BC Copper SHFE Copper BC Copper Price Spread Continues to Be Inverted and Widens

 Today, the most-traded BC copper 2509 contract opened at 69,780 yuan/mt and closed higher during the day. In the night session, the BC copper initially dropped to 69,720 yuan/mt, then the center of copper prices gradually rose. After the daytime opening, copper prices continued to climb, reaching a high of 70,880 yuan/mt near the end of the session, and finally closed at 70,710 yuan/mt, with a gain of 1.29%. Open interest reached 3,785 lots, down 187 lots from the previous trading day, and trading volume was 3,291 lots. On the macro front, on Friday, Powell's remarks at the Jackson Hole central bank symposium were cautious; although he did not commit to an interest rate cut, he reinforced market expectations for a September rate cut and also mentioned accumulating employment risks and persistent inflation pressures. After his speech, the US dollar index saw its largest single-day decline since early August, which was bullish for copper prices. Domestically, recent State Council meetings and the national trade-in policy promotion meeting have clarified relevant deployments, signaling increased policy efforts. Fundamentally, the scale of imported supply is limited, with only some domestic sources entering the market, leading to a tight supply landscape. On the demand side, as month-end approaches, downstream enterprises generally face financial pressure, and with copper prices fluctuating at highs, this has dampened procurement sentiment. Inventory-wise, as of August 25, SMM's national mainstream copper inventories decreased by 8,700 mt to 123,000 mt compared to the previous Thursday.

The SHFE copper 2509 contract closed at 79,690 yuan/mt. If the BC copper 2509 contract is 70,710 yuan/mt, its post-tax price would be 79,902 yuan/mt, resulting in a price difference of -212 between the SHFE copper 2509 contract and the BC copper contract, maintaining an inverted spread that widened from the previous day.
3.Selling sentiment declined, SHFE copper spot premiums remained firm

Today, reported that spot prices of #1 copper cathode against the current-month 2509 contract ranged from a premium of 80 yuan/mt to a premium of 220 yuan/mt, with an average premium of 140 yuan/mt, down by 10 yuan/mt from the previous trading day;  #1 copper cathode prices stood at 79,270-79,520 yuan/mt. Fed Chairman Powell's remarks at the Jackson Hole central bank symposium strengthened market expectations for an interest rate cut in September, causing the US dollar to fall below the 98 mark and copper prices to strengthen accordingly. The SHFE copper 2509 contract showed a strong trend in the morning session, hovering around 79,220 yuan/mt before rapidly surging to 79,480 yuan/mt around 11 a.m. and closing at 79,390 yuan/mt in the morning. The price spread between futures contracts for adjacent months remained nearly flat, while the backwardation structure persisted in distant months.
       Daytime sales sentiment declined notably, primarily due to the upcoming transition to cargoes with invoices dated next month tomorrow and limited replenishment of imported supplies over the weekend, with some domestic arrivals being quickly traded; the purchasing sentiment for copper cathode in Shanghai stood at 3.15, while the sales sentiment was 3.19. . In the morning session, mainstream standard-quality copper traded at around a premium of 100 yuan/mt, with difficult access to lower-priced supplies after deals were concluded at a premium of 60-80 yuan/mt in Changzhou. Affected by copper scrap policies, non-registered and non-standard supplies saw strong trading. Although high-quality copper supplies remained scarce, market demand for them weakened, leading to a slight price decline.
       Looking ahead to tomorrow, after the transition to cargoes with invoices dated next month, market trading activity is expected to decline. Maintenance at northern refineries will reduce copper supplies to Shanghai, and with limited domestic replenishment anticipated, spot premiums for Shanghai copper are expected to remain firm.

4.US Fed's stance wavers as fundamental demand support emerges

Macro, expectations for US Fed interest rate cut show clear internal divisions, with the market wavering on the September policy path. US economic data is mixed; PMI hit an eight-month high, indicating economic resilience, but initial jobless claims rose significantly, reinforcing signals of weakening employment. The misalignment between inflation and employment has intensified dollar volatility, leading copper prices to fluctuate downward. Domestically, China plans to launch a 500 billion yuan quasi-fiscal tool, focusing on new energy and artificial intelligence, which is bullish for medium and long-term copper consumption. Overall, the interplay of overseas interest rates and tariff negotiations, geopolitical developments, and Chinese policy support keeps LME copper around $9,700/mt, while SHFE copper moves sideways near 78,700 yuan/mt.

Fundamentally, mine tenders were active this week, with Indonesia expecting its copper concentrate exports to reach 90% of the government-approved export quota for this year. However, El Teniente's production forecast for the year remains significantly lower, limiting upside room for TC. Domestically, the backwardation structure of SHFE copper widened this week. Despite a notable increase in imported copper arrivals, downstream consumption showed strong support at the end of the off-season. In general, a tight balance is expected to persist in September.

Looking ahead to next week, the US Fed has not provided clear guidance on the direction of interest rate cuts, making it less likely for the market to be significantly affected by dollar fluctuations in the short term. Characteristics of the peak consumption season are beginning to emerge, providing strong support on the demand side for base metals. LME copper is expected to fluctuate between $9,700-9,850/mt, and SHFE copper between 78,500-79,500 yuan/mt. On the spot front, increased arrivals have impacted price spreads among brands, and a short-term rise in imports may put slight pressure on premiums. Spot prices against the SHFE copper 2509 contract are expected to range from a premium of 30 yuan/mt to 200 yuan/mt.

5. BC Copper 2509 contract saw a slight increase, with the tug-of-war between sellers and buyers dominating the trend

Today, the most-traded BC copper 2509 contract opened at 69,640 yuan/mt and closed higher on the day. During the night session, BC copper opened lower but moved higher, probing a low of 69,570 yuan/mt before fluctuating upward to reach a high of 69,980 yuan/mt, after which the price center declined. After the daytime opening, the center gradually fell as bulls reduced their positions in the morning trading session. In the afternoon, prices fluctuated considerably and closed at 69,740 yuan/mt, up 40 yuan/mt or 0.06%. Open interest stood at 3,972 lots, down 150 lots from the previous trading day, while trading volume was 2,264 lots, a decrease of 287 lots. On the macro front, US economic data were mixed; the August composite PMI hit an eight-month high, but initial jobless claims rose significantly. The US Fed remains divided over cutting interest rates. Fed Chairman Jerome Powell will deliver a key speech at 10:00 pm tonight. Amid growing calls for political intervention and the challenge of balancing inflation and employment, attention will be on how Powell sets the tone for policy direction in September and beyond. Fundamentally, on the supply side, imports continued to arrive, but domestic supply decreased. Demand side, downstream purchasing sentiment remained driven by essential needs.

The SHFE copper 2509 contract closed at 78,690 yuan/mt. If the BC copper 2509 contract is at 69,740 yuan/mt, its post-tax price would be 78,806 yuan/mt, resulting in a price difference of -116 yuan/mt between the SHFE and BC copper 2509 contracts, with the spread remaining inverted and narrowing slightly from the previous day.