China Desk · 2026-10-18

China Desk Digest 2026-10-18

Copper Backwardation Deepens as LME Warrants Cancel

SHFE copper's November-December spread widened to 680 yuan per tonne, a 0.63 percent premium for the front month, keeping the curve in backwardation (China domestic curve, as of 2026-10-16). That structure signals tight nearby availability for domestic buyers. On the warrant side, LME copper cancelled warrants stood at 85,550 tonnes, pushing the cancelled ratio to 37.75 percent (LME warrant data, as of 2026-10-16). Desk attention now turns to Monday's Q3 GDP and September activity data, plus the Oct 20 LPR decision (CLS_Telegram, 2026-10-18).

PTA Curve Shows Steepest Premium Across the Board

CZCE PTA's October-November spread reached 224 yuan per tonne, or 3.33 percent, the sharpest backwardation on today's term sheet (China domestic curve, as of 2026-10-16). The front month commands a heavy premium over the next, pointing to immediate demand for the polyester feedstock. Hengli Petrochemical said first-three-quarter net profit rose 104.20 percent year on year, citing recovering refining and PTA processing spreads (CLS_Telegram, 2026-10-18). Watch whether the steep curve persists into the main 2701 month.

Soybean Meal Signals Turn Soft Against Firm DCE Contango

SunSirs flagged soybean meal's M10 crossing below M20 on Oct 18, with the spread at -2.50 CNY/t, turning negative and hinting at a correction (Sina_Futures, 2026-10-18). The DCE meal curve already sits in contango, with November-December at -56 yuan per tonne, or -1.69 percent (China domestic curve, as of 2026-10-16). That combination of a bearish technical cross and a soft forward curve gives traders a coherent near-term signal on feed-meal momentum.

Gold and Silver Hold Mild Contango as Analysts Split

SHFE gold's November-December spread printed -1.2 yuan, a -0.13 percent contango, while silver showed -14 yuan, or -0.1 percent (China domestic curve, as of 2026-10-16). Both precious metals remain gently upward-sloping, with the main month at 2612 and no roll. Wall Street's twelve analysts split on next week's gold: four see declines, two gains, six sideways (Sina_Futures, 2026-10-18). Some see midterm hedging as mildly bullish, though the Fed path and Middle East risk cut both ways.

Yangshan Premiums Edge Higher Across Both Categories

Yangshan copper premiums rose 1.00 dollar on both warrants and bills of lading, averaging 137.00 and 130.00 dollars respectively (Yangshan copper premium, as of 2026-10-16). The parallel uptick suggests import demand is firming at the margin rather than concentrated in one delivery form. Combined with SHFE copper's 680 yuan per tonne backwardation (China domestic curve, as of 2026-10-16), the premium move reinforces the picture of a tight domestic nearby market heading into next week's data and LPR announcements (CLS_Telegram, 2026-10-18).

Data provenance

• China domestic term structure (M1-M2 spread, main contract) as of 2026-10-16
• LME cancelled warrants as of 2026-10-16
• Yangshan copper premium (USD/t) as of 2026-10-16
• China headlines, 2026-10-18
• English-native China flashes — SMM_EN / Mysteel_EN, 2026-10-18