China Desk · 2026-10-22

China Desk Digest 2026-10-22

Copper: SHFE Backwardation Deepens as LME Cancelled Warrants Climb

SHFE copper's November-to-December spread widened to 750 yuan per tonne, a 0.69% backwardation, keeping near-term delivery tight for holders (China domestic curve, as of 2026-10-22). LME copper cancelled warrants stood at 56,875 tonnes, or 24.33% of opening stock, signaling further warehouse withdrawals ahead (LME warrant data, as of 2026-10-21). Yangshan copper premiums rose 10 to an average of 158, confirming firmer import demand (Yangshan copper premium, as of 2026-10-22). Traders should watch whether the SHFE curve steepens further if LME cancellations persist.

Rebar: Night Session Slips While Term Structure Stays Backwardated

SHFE rebar fell 0.62% in the Oct 22 night session, leading declines across black-series products (CLS_Telegram, 2026-10-22). The November-to-December spread held at 33 yuan per tonne, a 1.08% backwardation, with the main month unchanged at 2701 (China domestic curve, as of 2026-10-22). The combination of a soft cash close and a still-inverted curve suggests near-term supply remains tighter than the forward view. Desk attention turns to whether construction demand stabilizes into the 2701 delivery window.

Gold: Spot Slide Meets SHFE Contango as Metal Carries a Discount

Spot gold dipped to $4,050, down 2.18% on the day (CLS_Telegram, 2026-10-22). SHFE gold's November-to-December spread sat at -2.26 yuan per gramme, a -0.25% contango, with the main month at 2612 (China domestic curve, as of 2026-10-22). Silver mirrored the shape, with a -31 spread and -0.22% contango (China domestic curve, as of 2026-10-22). The flat-to-negative curve alongside a spot pullback points to easing near-term scarcity rather than a structural squeeze.

Zinc: LME Cancellations Rise as East China Premiums Ease

LME zinc cancelled warrants reached 16,600 tonnes, a 9.98% ratio against opening stock of 166,325 tonnes (LME warrant data, as of 2026-10-21). In the physical market, Shanghai traders continued to lower offers and east China premiums declined (SMM_EN, 2026-10-22). The divergence between rising warrant cancellations and softer domestic premiums leaves the near-term arbitrage unclear. Traders should track whether falling Chinese premiums slow further LME outflows.

Lithium Carbonate: GFEX Curve Holds Backwardation Below Key Level

Lithium carbonate prices dropped below 100,000 yuan per metric tonne as supply growth outpaced declining demand (SMM_EN, 2026-10-22). GFEX lithium carbonate's November-to-December spread stayed at 660 yuan per tonne, a 0.69% backwardation, with the main month at 2701 (China domestic curve, as of 2026-10-22). The inverted curve persists even as spot weakens, implying near-term deliverable supply remains comparatively tight. Watch whether the 2701 contract holds its premium if spot continues to slide.

Data provenance

• China domestic term structure (M1-M2 spread, main contract) as of 2026-10-22
• LME cancelled warrants as of 2026-10-21
• Yangshan copper premium (USD/t) as of 2026-10-22
• China headlines, 2026-10-22
• English-native China flashes — SMM_EN / Mysteel_EN, 2026-10-22