China Desk · 2026-10-03

China Desk Digest 2026-10-03

Copper Term Structure Holds Steep Backwardation

SHFE copper's front-month premium over the next month stood at 800 CNY/t, keeping the curve in backwardation (China domestic curve, as of 2026-09-30). That spread equates to 0.73 percent of the front-month price, a rich carry for anyone holding physical against the curve. The main month stayed at 2611 with no roll, so positioning has not shifted. Traders watching tightness signals should note the premium persisted through quarter-end without flattening (China domestic curve, as of 2026-09-30).

Rebar Curve Flips to Contango as Momentum Fades

SHFE rebar's front month now trades 58 CNY/t below the next month, a contango of 1.87 percent (China domestic curve, as of 2026-09-30). The main month remains 2701 with no roll, so the curve shape is genuine rather than roll-driven. Separately, SunSirs showed the rebar mean diff at 17.28 CNY/t, shifting from widening positive to narrowing, signaling gains slowed (Sina_Futures, 2026-10-03). The combination of a contango curve and fading momentum is worth watching for ferrous desks.

PTA Backwardation Deepens to 5.35 Percent

CZCE PTA's front-month premium over the next month reached 356 CNY/t, the steepest backwardation on the board at 5.35 percent (China domestic curve, as of 2026-09-30). The main month held at 2701 with no roll, confirming the structure is not an artifact of the roll cycle. Such a wide premium points to immediate tightness in the polyester chain. Desks tracking spreads should note this was the largest percentage gap among the listed contracts (China domestic curve, as of 2026-09-30).

Palm Oil Mean Diff Narrows as Downside Momentum Slows

SunSirs showed the palm oil futures mean diff at -112.00 CNY/t on Oct 3, moving from widening negative to narrowing (Sina_Futures, 2026-10-03). That shift indicates downside momentum slowed and a turning point appeared in the oil complex. Soybean oil also saw its M10 line cross above M20, with the mean diff turning positive at 0.50 CNY/t (Sina_Futures, 2026-10-03). Together, the two oils suggest the selloff in tropical and domestic vegoils is losing steam.

Soybean Meal Weakens Again While Corn Starch Turns Up

SunSirs showed the soybean meal mean diff at -8.50 CNY/t, shifting from narrowing negative to widening again, with downside speed re-accelerating (Sina_Futures, 2026-10-03). In contrast, corn starch's M10 line crossed above M20 and the mean diff turned from negative to positive at 0.00 CNY/t, signaling the start of an uptrend (Sina_Futures, 2026-10-03). The divergence matters for feed and starch spread desks. Styrene also crossed higher with a mean diff of 4.50 CNY/t (Sina_Futures, 2026-10-03).

Data provenance

• China domestic term structure (M1-M2 spread, main contract) as of 2026-09-30
• Yangshan copper premium (USD/t) as of 2026-09-30
• China headlines, 2026-10-03