China Desk · 2026-10-07

China Desk Digest 2026-10-07

Copper Holds Steep Backwardation Into the Holiday

SHFE copper's October-to-November spread stood at 800 yuan per tonne, or 0.73%, keeping the curve in backwardation as of the September 30 close (China domestic curve, as of 2026-09-30). The main month stayed on 2611 with no roll, so the tight front-end structure carried through the holiday break unchanged (China domestic curve, as of 2026-09-30). For desks running carry, that persistent premium on the nearby month signals nearby tightness rather than a roll-driven distortion, and it frames how post-holiday SMM copper commentary should be read against the curve rather than against flat price alone (China domestic curve, as of 2026-09-30).

PBOC Gold Buying Accelerates for 23rd Month

China's gold reserves reached 77.47 million ounces at end-September, up 0.74 million ounces month on month and ahead of August's 0.65 million ounce increase, extending the streak to 23 straight months (SMM_CN, 2026-10-07). The official sector bid arrives amid ongoing international price volatility, which matters for how desks frame safe-haven flows in the region (SMM_CN, 2026-10-07). On the SHFE curve, gold's October-to-November spread was negative 2.24 yuan per gramme, a mild contango of 0.25%, with the main month holding on 2612 (China domestic curve, as of 2026-09-30).

Palm Oil's Weak-Near, Strong-Far Setup After the Rally

Palm oil shows a clear weak-near, strong-far pattern, with producers in a high-output season keeping near-term prices soft while late-Q4 output cuts and Indonesia's B50 biodiesel policy are expected to lift the price center from lows (QHRB_Futures, 2026-10-07). Since mid-September, BMD December has dropped to MYR 4,491 per tonne and DCE palm oil slid to around CNY 9,500 per tonne, after both hit two-year highs earlier in the rally (QHRB_Futures, 2026-10-07). The pullback from those peaks frames the holiday debate over whether supply pressure or the biodiesel squeeze dominates the next leg (QHRB_Futures, 2026-10-07).

Yangshan Premiums Flat Through the Holiday Close

Yangshan copper warrant and bill premiums both printed unchanged on the final September reading, with the average warrant price at 119.00 and the average bill price at 114.00, each showing zero change (Yangshan copper premium, as of 2026-09-30). That flat print sits alongside a domestic copper curve still in backwardation, so the import premium gave no fresh signal on near-term demand into the break (Yangshan copper premium, as of 2026-09-30). Desks watching post-holiday re-opening should treat the static premium as a neutral starting point rather than evidence of either restocking or destocking pressure (Yangshan copper premium, as of 2026-09-30).

PTA Backwardation Deepens as Lithium Stays Firm

CZCE PTA's October-to-November spread reached 356 yuan per tonne, a 5.35% backwardation, the steepest curve reading in the September 30 term snapshot (China domestic curve, as of 2026-09-30). GFEX lithium carbonate also held backwardation, with the same spread at 520 yuan per tonne, or 0.44%, while the main month stayed on 2701 for both contracts with no roll (China domestic curve, as of 2026-09-30). The holiday-period SMM reviews of lithium ore and cathode markets land against that firm front-end structure, giving desks a curve context for the post-holiday conversion-margin debate (China domestic curve, as of 2026-09-30).

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, 2026-10-07
• English-native China flashes — SMM_EN / Mysteel_EN, 2026-10-07