Market Overview
During the September 16, 2026 trading session, the main Shanghai copper contract opened at 107,430 yuan per tonne and settled at 107,740 yuan per tonne, reflecting a 0.66% gain from the prior day's close. In overnight trading, the contract opened at 108,020 yuan per tonne and closed at 107,960 yuan per tonne, up 0.49% from yesterday afternoon's settlement.
Spot Market Conditions
According to SMM data, spot premiums for 1# electrolytic copper against the Shanghai copper 2609 contract ranged between 580-710 yuan per tonne, averaging 645 yuan per tonne, an increase of 85 yuan per tonne from the previous session. The Shanghai copper 2609 contract opened at 107,250 yuan per tonne, dipped briefly before climbing to a session high of 107,700 yuan per tonne, ultimately closing at 107,610 yuan per tonne. The month-on-month backwardation stood at 340-400 yuan per tonne, while the import loss for the current month ranged from 180-280 yuan per tonne.
Trading sentiment in the Shanghai market improved both on the sales and procurement fronts, with holders lowering quoted prices in early trading while standard-grade copper supply remained tight. Looking ahead, although imported copper is expected to arrive at ports in concentrated volumes, the inflow into the spot market will take time, making it difficult to significantly alleviate supply pressure in the near term. Mainstream brand copper sources remain scarce, and holders show a strong inclination to maintain firm price quotes. Elevated copper prices are suppressing downstream procurement, with enterprises only purchasing on a hand-to-mouth basis and showing limited acceptance of high premiums. The wide month-on-month spread supports spot premiums, and it is expected that spot premiums will remain elevated or decline slightly today, with continued monitoring of copper arrivals and downstream offtake.
Key News and Data
The Federal Reserve announced a 25-basis-point rate hike, raising the federal funds rate target range to 3.75%-4.00%, marking the first increase since July 2023 and aligning with market expectations after five consecutive meetings with no change. The policy statement revealed that the Federal Open Market Committee (FOMC) passed the resolution with a 12-0 vote. The latest dot plot shows the median federal funds rate projection for end-2026 rising from 3.8% in June to 4.1%, with 16 officials expecting at least one more rate increase this year. The statement noted that economic activity is expanding steadily with strong productivity growth, though inflation remains elevated. The FOMC's economic projections indicate one additional rate hike in 2026, with rates held steady through 2027. Rates are expected to decline in 2028 and remain between 3.5% and 3.75% through 2029. On inflation, the 2026 PCE forecast stands at 3.7%, with a return to the 2% target projected for 2029. Economic growth forecasts have been revised upward, with US GDP growth expectations of 2.3%, 2.4%, and 2.2% for 2026, 2027, and 2028 respectively, while the 2026 unemployment rate forecast was significantly revised down to approximately 4.1%.
On the mining front, a September 15 Reuters report citing an official document revealed that the Democratic Republic of Congo achieved a record copper export volume of 1.72 million tonnes in the first half of 2026, up from 1.65 million tonnes in the same period last year. The report indicated that the first half of 2026 was marked by an "export diversification offensive," as Congo sought to reduce its reliance on Chinese trade channels, with shipments to the United States and Europe doubling compared to 2025 levels. Since signing a strategic minerals partnership with Washington in December 2025, state-owned miner Gecamines has leveraged offtake arrangements with traders Mercuria and Glencore to channel its copper share from major mines, including those with Chinese-linked operations, to alternative markets. Congo banned copper and cobalt concentrate exports in June, yet first-half copper concentrate exports still totaled 151,202 tonnes, containing 50,629 tonnes of copper. The largest concentrate exporters included Eurasian Resources Group's Frontier Mining, along with Chinese-linked Kinsenda Copper Company, Everbright Mining, and Sabwe Mining.
On the smelting and import side, a September 15 external report indicated that Green Manganese Technologies has successfully completed initial metallurgical testing, demonstrating that its proprietary hydrometallurgical process can recover multiple critical metals from polymetallic nodules through a single integrated flow. These nodules contain nickel, cobalt, copper, and manganese, which are core inputs for battery, electronics, and defense supply chains. Unlike traditional processes that rely on multi-stage pyrometallurgical smelting involving sequential calcination and smelting to separate nickel-copper-cobalt alloys from manganese silicate slag, Green Manganese's hydrometallurgical platform is designed to extract all major critical metals in one integrated process. CEO Alexey Demykin noted that the appeal of polymetallic nodules lies in the concentration of multiple critical metals within a single rock type, and this new phase of critical minerals requires a fundamental shift in processing approaches rather than forcing next-generation polymetallic feedstocks into conventional technologies designed for single ores.
On the consumption side, concerns over safety risks among several US AI giants have intensified, prompting calls to slow the pace of AI iteration. Combined with rising US Treasury yields, chip stocks such as Nvidia have experienced sharp volatility, dragging down prices of computing-power metals including copper and tin. International markets have begun to flag risks associated with potential US policy shifts. Since September, the LME copper futures market structure has undergone a rapid reversal, transitioning from spot backwardation to futures contango. The Bank for International Settlements explicitly noted in its September quarterly report that funds are reducing concentrated bets on a handful of AI leaders. However, the industrial sector has not shown substantive contraction alongside financial market sentiment, and industry insiders judge that the base metals market will remain robust over the next two quarters overall.
On inventory and warehouse receipt data, LME warrant changes reflected an increase of 4,925 tonnes to 254,150 tonnes. SHFE warrants increased by 1,095 tonnes to 32,945 tonnes. As of September 14, domestic market electrolytic copper bonded warehouse inventories stood at 90,300 tonnes, a change of 2,800 tonnes from the prior week.
Strategy Outlook
Copper: Cautiously bullish. Overall, copper prices have remained relatively resilient against the backdrop of the Fed's rate hike, indicating that copper's underlying fundamentals remain robust. Therefore, for enterprises with hedging needs, it is still recommended to adopt a proactive approach by executing buy-on-dip hedging strategies.
Arbitrage: Stand aside for now.
Options: Short put at 74,000 yuan per tonne.
Risks
Peak-season demand continuing to fall short of expectations, and liquidity stampede risks.
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