On the 8th, copper futures on the Shanghai market showed a weak trend. The main contract for August 2026 opened with soft trading and moved into a sideways consolidation pattern in the afternoon, ultimately closing in negative territory. The opening price was 103,080 yuan per tonne, reaching a high of 103,500 yuan and a low of 102,720 yuan. Settling at 102,960 yuan the previous day, today's closing price was 102,850 yuan, representing a decline of 110 yuan or 0.11%. The total trading volume for the August 2026 contract throughout the session was 67,529 lots, an increase of 9,010 lots, while open interest rose by 1,150 lots to 149,665 lots. During the Asian trading session, London Metal Exchange copper prices initially climbed but later retreated. As of 15:07 Beijing time, the latest quote was $13,323.5 per tonne, down $11 or 0.08%.
Spot copper prices in the domestic market continued their downward trajectory. According to the Changjiang Nonferrous Metals Network, the price for Changjiang spot 1# copper was quoted at 103,110 yuan per tonne, a drop of 250 yuan, with a premium range of 190 to 230 yuan, which increased by 30 yuan. The Changjiang comprehensive 1# copper price was reported at 103,025 yuan per tonne, down 260 yuan, with a premium of 70 to 180 yuan, up 20 yuan. In Guangdong, the spot 1# copper price stood at 102,960 yuan per tonne, falling 270 yuan, with a discount of 40 yuan to a premium of 160 yuan, a rise of 10 yuan. The Shanghai region's 1# copper price was 103,010 yuan per tonne, decreasing by 250 yuan, with a premium of 70 to 150 yuan, up 30 yuan.
Market Analysis
From a macroeconomic perspective, the strategic standoff between the US and Iran in the Strait of Hormuz escalated sharply into direct military confrontation. The US military launched extensive airstrikes on over 80 targets within Iran, prompting immediate retaliation from Tehran. This development effectively nullified the fragile ceasefire agreement that had been in place for several weeks. The worsening geopolitical situation has sparked market fears over potential disruptions to global energy supplies, driving crude oil futures up by more than 3% to $72.93 per barrel. Renewed inflation concerns have bolstered the US dollar's appeal as a safe-haven asset, with the currency holding firm at a high level of 101.04, thereby exerting downward pressure on copper prices. Additionally, the US services PMI for June dipped to 54, indicating a slight cooling in business activity and new order growth, although the employment index returned to expansionary territory.
Domestically, the Ministry of Finance issued 90 billion yuan in 10-year government bonds with a winning yield of 1.7249% and a bid-to-cover ratio reaching 7.23 times, reflecting robust market demand for allocation. Concurrently, the Office of the State Council's Work Safety Committee, in collaboration with multiple departments, has initiated a campaign focused on rectifying illegal activities and enhancing safety compliance, targeting key sectors such as mining. This move involves strict crackdowns on operations lacking proper qualifications and violations of safety regulations, which may disrupt production at some mining sites.
The industrial supply-demand balance remains tight. On the supply side, the spot index for imported copper concentrate has fallen to -$128 per tonne. Data from the International Copper Study Group shows global copper mine supply from January to April declined by 1.2% year-on-year. Due to slower-than-expected output increases from major mines like Kamoa and Grasberg, coupled with production downgrades in Chile, the projected global copper mine output increase for 2026 has been revised down to 260,000 tonnes. The expansion of smelting capacity continues to outpace mine supply growth, sustaining a seller's market. In the smelting sector, Kazakhstan has followed Russia in completely suspending sulfur exports, reinforcing expectations of tighter supply for hydrometallurgical copper. High sulfuric acid prices are supporting elevated operating rates for domestic pyrometallurgical copper production, with refined copper output in July expected to see a slight month-on-month increase. Affected by tax invoice issues and a narrowing price gap between refined and scrap copper, the supply of recycled copper with proper invoices remains persistently tight. Processing fees for crude copper in southern and northern China have dropped to historical lows of 900 and 800 yuan per tonne, respectively. On the demand side, the traditional off-season, combined with high temperatures, heavy rainfall, and weakness in the property sector, has lowered the average operating rate for copper fabricators to 62.97%. However, demand from the power and new energy sectors provides structural resilience. Cumulative investments in State Grid projects and power generation sources from January to May grew by 13% and 9% year-on-year, respectively. Demand is also supported by AI computing infrastructure, ultra-high voltage power transmission projects, and new energy vehicles, where the adoption of pure electric and 800V high-voltage platforms is doubling copper usage per vehicle. Extreme heat in Europe is also boosting air conditioner exports, thereby lifting demand for copper tubes. Regarding inventories, destocking continues in regions outside the US. Copper inventories on the Shanghai Futures Exchange have fallen to 122,677 tonnes, a new low for the year, while LME inventories stand at 314,900 tonnes. In contrast, COMEX inventories have risen to 606,000 tonnes, creating a global pattern of "high total inventories alongside structural shortages outside the US."
In the spot market, available supply remains relatively tight, with holders demonstrating a strong willingness to support prices, leading to a continued strengthening of spot premiums. Downstream enterprises are largely maintaining a cautious stance, with transactions primarily driven by essential demand, while discretionary demand remains limited. Given the constrained arrivals expected this week and copper prices oscillating around the 103,000 yuan per tonne level, downstream consumption resilience persists, keeping market trading sentiment moderate.
Summary and Outlook
In summary, the re-ignition of conflict between the US and Iran and the breakdown of the ceasefire agreement have driven crude oil prices higher, reigniting inflation concerns and strengthening the US dollar's safe-haven appeal, which weighs on copper prices. However, the global structural shortage in mine supply remains unchanged. Domestic copper concentrate processing fees are deeply entrenched in negative territory. Concurrently, incremental demand from AI computing, ultra-high voltage projects, and extreme heat in Europe, alongside the unresolved issue of US copper tariffs, continues to provide strong underlying support for copper prices. Spot premiums remain firm, raw material inventories are at low levels, and resilience in essential procurement demand persists. In the short term, copper prices are expected to maintain a range-bound pattern, caught between tightening macro sentiment and the tight supply-demand balance.
It is anticipated that the main August 2026 copper contract on the Shanghai Futures Exchange will trade within a range of 102,500 to 104,000 yuan per tonne tomorrow.
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