I. Price Action & Technical Analysis
SHFE Copper main contract closed at CNY 110,330/t on September 23, down 0.8% on the day, with volume of 68,955 lots and open interest of 171,175 lots. The prior four sessions closed higher consecutively: September 22 closed at CNY 111,320/t, up 1.24%; September 21 closed at CNY 110,180/t, up 0.59%; September 18 closed at CNY 109,620/t, up 1.4%; September 17 closed at CNY 108,500/t, up 1%. Over the past 5 sessions, the price rose cumulatively from CNY 108,500/t to CNY 110,330/t, a gain of about 1.69%.
The moving-average system is in a bullish alignment: on September 23, MA5 stood at CNY 109,990/t and MA20 at CNY 109,280.5/t, with the close of CNY 110,330/t above both, and MA5 above MA20, indicating a firm short-term trend. The 20-day high H20 is CNY 112,330/t and the 20-day low L20 is CNY 106,650/t; the current price sits in the upper-middle of the range, about 1.78% below the high and about 3.45% above the low.
On the pivot system, the September 23 pivot P is CNY 110,603.3/t, first resistance R1 is CNY 110,956.7/t, and first support S1 is CNY 109,976.7/t. The close of CNY 110,330/t is about 0.25% below P and about 0.32% above S1, showing that bulls and bears contested below the pivot, with a slight short-term bearish bias. If the price holds firmly above P (110,603.3), it may test R1 (110,956.7) and the 20-day high of 112,330; if it breaks below S1 (109,976.7), the next support lies in the dense zone of MA5 (109,990) and MA20 (109,280.5).
Internationally, HG=F closed at USD 6.678/lb on September 23, down 1.21%, with a 5-day gain of 5.17%, a 20-day gain of 0.81%, ATR of 0.1315, pivot P of 6.807, R1 of 6.869, and S1 of 6.702; the close is below S1, underperforming China in the short term. The open-interest change chPos is 76.5%, down markedly from 93.4% on September 22, indicating long liquidation on the international side.
Risk metrics show DD52w at 13.49%, DD20d at 6.96%, Sharpe30 at 1.009, VaR95 at -2.97%, and Vol20 at 24.97%, with volatility at a moderate level.
II. Fundamental Drivers
On the macro rates side, the US 10-year Treasury yield ^TNX stood at 5.114 on September 23, up 3.04% on the day, remaining elevated and pressuring valuations for non-yielding assets and high-inventory commodities. The US Dollar Index DX-Y.NYB was at 101.12, up 0.68% on the day; a stronger dollar typically weighs on USD-denominated copper. If Treasury yields and the dollar rise in tandem, upside for copper is capped; if the dollar retreats, copper may find support.
On inventories, SHFE Copper warrants stood at 19,088 tonnes on September 23, a weekly change of -1,717 tonnes; on September 22 they were 20,805 tonnes, a weekly change of -1,503 tonnes, marking consecutive destocking. LME warehouse stocks were 254,250 tonnes on September 22 and 255,875 tonnes on September 21, a slight decline. China's absolute inventory level is low; continued destocking would support near-month contracts.
On geopolitics and supply disruptions, international headlines over the past 48 hours show: a fatal accident at BHP's Escondida mine (Mining_Copper, 2026-09-23 19:33:29), which may trigger near-term supply concerns; an attack on Glencore's Cerrejón coal-mine railway halting operations (Mining_Copper, 2026-09-23 16:22:42), a coal asset but reflective of operating risk in key producing regions; and Selkirk Copper's Minto project valued at USD 494m, nearly three times construction cost (Mining_Copper, 2026-09-23 13:57:33), showing copper-mining assets remain attractive. On the China side, Xinhu Nonferrous commentary points to the unresolved US copper tariff as the main driver of the copper rally (Sina_Futures, 2026-09-23 09:40:04), while a Morgan Stanley report says CCL and copper foil are opening a USD 10bn-plus incremental market (SMM_CN, 2026-09-23 15:47:00), with AI-related demand a medium- to long-term tailwind.
Overall, macro headwinds and supply disruptions coexist, leaving copper in a high-range consolidation with mixed bullish and bearish factors.
III. Positioning & Fund Flows
International COT positioning shows that as of 2026-09-15, total open interest OI was 289,463 lots, longs L were 83,704 lots, shorts S were 18,598 lots, and net long net was 65,106 lots, a weekly change Δ of -17,048 lots. The prior three weeks' net longs were: 82,154 lots on September 8 (Δ+9,272), 72,882 lots on September 1 (Δ-3389), and 76,271 lots on August 25 (Δ-2377). Net longs have fallen consecutively from the September 8 peak of 82,154 lots to 65,106 lots, a decline of about 20.75%, indicating speculative position reduction.
On crowding, September 15 netPct was 22.49%, crowd 63.36, CTA 98, and hedge 58.27%. Compared with September 8 (netPct 27.62%, crowd 69.39), September 1 (netPct 25.79%, crowd 68.96), and August 25 (netPct 26.92%, crowd 69.26), both the net-long share and crowding have retreated from highs, CTA held at 98, and the hedge ratio rose from 53.66% to 58.27%, showing some capital shifting toward hedging.
On China positioning, SHFE Copper main-contract OI was 171,175 lots on September 23, up 24,381 lots from 146,794 lots on September 22, while the price fell 0.8%; rising open interest on falling prices indicates short entry. OI was 151,880 lots on September 18 and 159,506 lots on September 17, with considerable fluctuation.
On options and volatility, ^VIX stood at 15.18 on September 23, up 2.08%, remaining low, with limited market panic. HG=F's ATR is 0.1315 and Vol20 is 24.97%, moderate volatility. If net longs continue to decline and crowd breaks below 60, near-term correction pressure will rise; if net longs stabilize and recover, prices may resume their uptrend.
IV. Cross-Asset Relative Value
On the copper-gold ratio, HG_GC_RATIO stood at 0.0016 on September 23, with a 1-year percentile P1Y of 91.67% and a 3-year percentile P3Y of 47.62%. The ratio is at a high 1-year percentile, meaning copper has outperformed gold, but the 3-year percentile is neutral, so the medium- to long-term relative value is not extreme. If the copper-gold ratio retreats from highs, it may reflect copper weakening versus gold, warranting attention to changes in gold's safe-haven demand.
On the term structure, the international CONTANGO M1-M2 is -0.0385 (-0.57%), RY is -6.79%, and slope is 0.0353. M1-M2 is negative, showing near-month discount to far-month, a Contango structure, but the magnitude is small. If Contango deepens, it reflects ample near-term supply; if it shifts to Backwardation, near-term tightness.
On the dollar-copper linkage, the Dollar Index is 101.12, up 0.68%, pressuring copper. The US 10-year yield is 5.114, up 3.04%, and rising real rates are unfavorable for copper. If both the dollar and Treasury yields retreat, copper may gain relative-value support.
V. Sentiment
Over the past 48 hours there were 6 China-related headlines, including broad declines in base metals, with LME zinc, alumina, polysilicon and coking coal down more than 1% and lithium carbonate down over 3% (SMM Daily Review, 2026-09-23 17:43:00), leaving overall sentiment bearish. Xinhu Nonferrous commentary focused on the unresolved US copper tariff (Sina_Futures, 2026-09-23 09:40:04), showing heightened market attention to policy uncertainty. Morgan Stanley's report on a USD 10bn-plus incremental market for CCL and copper foil (SMM_CN, 2026-09-23 15:47:00) is a structural positive.
On international headlines, the Escondida accident (Mining_Copper, 2026-09-23 19:33:29) may spark supply concerns, sentiment bullish; the Glencore Cerrejón railway attack (Mining_Copper, 2026-09-23 16:22:42) is bullish; Ivanhoe Electric's rising costs (Mining_Copper, 2026-09-23 16:04:29) are bearish. Overall, the sentiment score is neutral-to-bearish, with bearish headlines outnumbering bullish ones over the past 48 hours.
VI. Historical Statistical Patterns
Seasonally, late September to early October is typically a transition into China's peak copper consumption season, with downstream demand from cables, air conditioners, and other sectors rising month-on-month.
Based on currently available data, SHFE Copper has risen approximately 1.69% cumulatively over the past 5 days, while the international contract HG=F has gained 5.17% over the same period. The divergence in gains between international and Chinese markets is pronounced, with China's follow-through lagging the international market. Historical patterns suggest that if the international market continues to outperform China, the import window may close, raising the probability of a subsequent catch-up rally in China; conversely, if the international market pulls back, China tends to follow lower.
On inventory seasonality, SHFE warrants changed by -1,717 tonnes on the week, extending destocking and aligning with typical September peak-season characteristics. LME inventories stand at 254,250 tonnes, a neutral absolute level. If destocking persists beyond October, seasonal support will remain intact.
VII. Long-Short Game Scenario Analysis
Bullish factors: 1) SHFE inventories at 19,088 tonnes, down 1,717 tonnes on the week, with consecutive destocking pointing to tight near-term supply; 2) SHFE Copper closed at CNY 110,330/t, holding above the MA5 (109,990) and MA20 (109,280.5), with moving averages in a bullish alignment; 3) a fatal accident at the Escondida mine (Mining_Copper, 2026-09-23) may trigger short-term supply disruption; 4) a Morgan Stanley report cites a USD 10bn incremental opportunity in the CCL and copper foil space (SMM_CN, 2026-09-23), a medium- to long-term tailwind from AI demand; 5) the copper-gold ratio sits at the 91.67th percentile over one year, indicating relative copper strength.
Bearish factors: 1) COT net longs at 65,106 lots, down 17,048 lots from the prior week, as speculative funds cut positions; 2) the US Dollar Index at 101.12, up 0.68%, and the US 10Y Treasury yield at 5.114, up 3.04%, creating macro headwinds; 3) HG=F closed at 6.678, below S1 (6.702), with the international market weak on a short-term basis; 4) China's base metals broadly declined, with Lithium Carbonate falling more than 3% (SMM Daily Review, 2026-09-23), reflecting bearish sentiment; 5) SHFE Copper saw an open interest build of 24,381 lots on September 23 alongside a price decline, indicating short entries; 6) the term structure is in Contango, with near-month contracts at a discount.
Short- to medium-term balance of forces: In the short term (1–5 days), bears hold a slight edge, given the international market's break below S1, a stronger US dollar, and COT position cuts. In the medium term (1–3 months), bullish factors remain, with inventory drawdowns and supply disruptions providing support. If prices hold above the MA20 (109,280.5), the medium-term bullish structure remains intact; if breached, a test of L20 (106,650) becomes likely.
VIII. Trading Strategies & Risk Management
Strategy 1 (Range-bound dip buying): If SHFE Copper pulls back and stabilizes near the MA20 (109,280.5), a light long position can be attempted, with an entry reference of CNY 109,300/t, a stop-loss reference of CNY 108,500/t (below the September 17 close), and a target reference of CNY 110,950/t (near R1), over a 1–5 day horizon, with position size capped at 20%. Exit if the stop-loss is breached.
Strategy 2 (Breakout following): If SHFE Copper holds above the pivot P (110,603.3) and breaks above R1 (110,956.7), go long in line with the trend, with an entry reference of CNY 111,000/t, a stop-loss reference of CNY 110,300/t, and a target reference of CNY 112,330/t (the 20-day high), over a 1–5 day horizon, with position size capped at 15%. Stand aside if the breakout fails.
Risk management: Keep risk per trade within 2% of total capital. VaR95 is -2.97% and Vol20 is 24.97%, indicating moderate volatility; position sizing discipline is required. If the US Dollar Index breaks above 102 or the US 10Y Treasury yield breaks above 5.2%, long strategies should be approached with caution.
IX. This Week's Data Calendar
China economic calendar for the next 7 days: 2026-09-29 21:30 [CNY/HIGH] Manufacturing PMI. Focus on the guidance from Manufacturing PMI for copper demand expectations; a beat would be bullish for copper prices, while a miss would weigh on them.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.