Market Snapshot and Key Data
Futures trading data for August 19, 2026 shows the main Shanghai copper contract opened at 107,630 yuan per tonne and settled at 106,850 yuan per tonne, marking a 1.00% decline from the prior session's close. During overnight trading, the contract opened at 107,020 yuan per tonne and closed at 107,230 yuan per tonne, representing a 0.23% gain from the afternoon settlement.
According to SMM data, spot SMM 1# electrolytic copper commanded a premium of 310-480 yuan per tonne over the SHFE 2609 contract, averaging 395 yuan per tonne — a decrease of 20 yuan per tonne from the previous session. The SHFE 2609 contract dipped at the open before stabilizing and recovering, closing at 106,900 yuan per tonne. The inter-month backwardation stood at 330-370 yuan per tonne, while import losses widened to 510-570 yuan per tonne. In the Shanghai market, both buying and selling sentiment improved simultaneously, with holders reducing quotes during trading hours. High-grade copper supplies remained tight, while non-registered copper traded at lower premiums. The pullback in copper prices has prompted downstream buyers to restock at lower levels, with some order books showing signs of recovery and stronger purchasing intentions. However, increased inflows from bonded warehouse receipts have boosted spot supply, prompting holders to offer concessions to facilitate transactions, while downstream counteroffers have suppressed premiums. The scarcity of high-grade copper and widening backwardation have provided some support. Overall assessment suggests spot premiums over the 2609 contract should persist today.
Key Industry Developments
The U.S. Treasury has announced plans to "at least double" its liquidity support buyback program for long-term government bonds, increasing the scale from $2 billion to $4 billion, with repurchases covering 10-year to 30-year maturities. Following this announcement, long-end Treasury yields declined noticeably. This comes after a period of sustained increases in long-term U.S. yields, with the 30-year yield reaching 5.31% on August 17 — the highest level since June 2007.
On the geopolitical front, U.S. President Donald Trump stated on August 19 that he might resume negotiations with Iran "at some point," but emphasized that Iran must completely abandon its nuclear weapons program. This contrasts with Trump's social media comments on August 18, where he declared there would be no talks or dialogue with Iran currently or in the future. Meanwhile, Rezaei, a member of Iran's Parliamentary National Security and Foreign Policy Commission, warned that if Iran's interests are harmed anywhere in the world, Tehran would respond against hostile nations and governments through measures such as increased tariffs or asset seizures in the Strait of Hormuz.
On the mining front, Anglo Asian is working toward transforming into a mid-tier copper-focused producer by 2029. Beyond its Gilar mine, the company plans to bring three additional mines into production: Zafar, Xarxar, and Garadag. In 2024, Anglo Asian's operations were severely constrained by environmental closures, though production resumed before year-end. Total gold equivalent output reached 16,760 ounces. Additionally, Minera Escondida has submitted an application to Chile's National Electric Coordinator for the NEHVTI project, designated "Proyecto Fehaciente," which plans to connect new power infrastructure to the Zaldívar–Escondida 1×220 kV transmission line, with the connection point approximately 2.7 kilometers from the existing Escondida substation. The project includes construction of the Nueva Escondida substation along with associated 220 kV and 69 kV transmission facilities. This initiative is designed to maintain power supply for Escondida mine operations should the existing substation be decommissioned in the future, potentially linked to the removal of the Los Colorados concentrator plant. According to the company's timeline, phase one is expected to connect to the 220 kV system by June 2029, with phase two completing the 69 kV network upgrade and reconfiguration by August 2029. This power infrastructure safeguard project has no immediate impact on short-term copper output but supports Escondida's long-term operational continuity.
Regarding smelting and imports, foreign media reported on August 18 that McEwen Copper's Los Azules project — one of Argentina's largest undeveloped copper deposits — is targeting production commencement around 2030. During the first five years of operation, average annual cathode copper output is projected at approximately 205,000 tonnes. The final investment decision largely depends on board approval of financing arrangements, with the company planning preliminary site work and equipment procurement ahead of full-scale construction. The project still requires detailed engineering design and remaining permits, while market participants are evaluating whether Argentina's current investment framework can maintain stability over the mine's multi-decade operating lifespan. Even with Rio investing the full $600 million, the company would remain a minority investor given its valuation exceeding $2 billion.
On consumption, customs data released on August 18 shows China's exports of unwrought copper and copper products reached 125,896 tonnes in July 2026, down 34.0% year-on-year. Cumulative exports for January-July totaled 1,004,379 tonnes, up 7.5% year-on-year. July imports of unwrought copper and copper products stood at 420,000 tonnes, declining 11.3% year-on-year, while cumulative imports for the first seven months reached 2.92 million tonnes, down 6.2% year-on-year.
Inventory data shows LME warehouse receipts changed by +12,425 tonnes to 235,975 tonnes from the previous session. SHFE warehouse receipts decreased by 1,423 tonnes to 56,698 tonnes. As of August 17, domestic electrolytic copper spot inventories stood at 133,900 tonnes, reflecting a change of +17,200 tonnes from the prior week.
Strategy Outlook
Copper: Cautiously bullish. Overall, the August SHFE copper contract has completed delivery with prices immediately pulling back. Meanwhile, recent shifts in the Comex-LME premium have triggered significant deliveries into LME warehouses, though the primary delivery locations remain in North America (New Orleans). As long as Comex continues to offer premiums, inventory will likely flow toward Comex warehouses, meaning this situation is unlikely to exert sustained downward pressure on copper prices. Enterprises with hedging requirements are still advised to actively pursue buy-side hedging operations, with participation recommended when prices enter the 106,000-106,500 yuan per tonne range.
Arbitrage: Stand aside
Options: Sell puts
Risk factors: Comex inventory outflows and liquidity stampede events
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