I. Price Action & Technical Analysis
As of 2026-09-24, SHFE Copper main contract continuous closed at CNY 110,130/t, with a single-day change of -0.59%, volume of 73,438 lots, and open interest of 178,590 lots. Over the past five trading sessions, the structure has been a “rally-and-fade”: 2026-09-22 closed at CNY 111,320/t (+1.24%), marking the range high, followed by 09-23 at CNY 110,330/t (-0.8%) and 09-24 at CNY 110,130/t (-0.59%), with a cumulative give-back of about 1.07% over the two sessions.
On the moving-average system, the 09-24 MA5 stands at CNY 110,316/t and MA20 at CNY 109,372/t; the close of CNY 110,130/t sits about CNY 186 below MA5 and about CNY 758 above MA20. The short MA has flattened while the medium-term MA is still rising, a “weakening bullish alignment” pattern. The 20-day range high H20 is CNY 112,330/t and the low L20 is CNY 106,650/t, leaving the current price in the upper-middle portion of the range, around the 60th percentile. The pivot P is CNY 110,210/t, R1 is CNY 110,490/t, and S1 is CNY 109,850/t; the close is slightly below the pivot, pointing to intraday softness.
Against the international benchmark, HG=F closed 09-24 at USD 6.719/lb (+0.61%), with a 5-day gain of 3.01% and a 20-day gain of 2.89%; P is 6.771, R1 is 6.817, S1 is 6.739, and ATR is 0.1298, indicating rising offshore volatility with the close below the pivot.
Alternative volatility references are the offshore Vol20 of 25.8%, VaR95 of -2.97%, and Sharpe30 of 1.079, along with ^VIX at 15.67 (+3.23%, 2026-09-24), suggesting a marginal deterioration in risk appetite. An ATR of 0.1298 USD/lb implies an average daily swing of about 1.9%; translated into SHFE Copper, short-term stop-losses should allow at least a 1.5%-2% buffer.
Key levels: the first overhead resistance is R1 at CNY 110,490/t, the second is H20 at CNY 112,330/t; the first support below is S1 at CNY 109,850/t, the second is MA20 at CNY 109,372/t, and the third is L20 at CNY 106,650/t. A close holding above 110,490 CNY/t would open a test of 112,330 CNY/t; a break below 109,372 CNY/t would bring 106,650 CNY/t into view.
II. Fundamental Drivers
On the macro rate front, the US 10-year Treasury yield ^TNX stands at 5.16% (+0.94%, 2026-09-24), an elevated level; rising real rates weigh on the valuation of non-yielding assets and industrial metals. The dollar index DX-Y.NYB is at 101.25 (+0.15%), and a firmer dollar undermines the upside momentum of USD-denominated copper. Together, this mix implies that the “financial attribute” offers limited support to copper, leaving prices more dependent on the “commodity attribute,” namely inventories and spot tightness.
Inventories show clear destocking. SHFE warehouse warrants stood at 16,620 tonnes on 2026-09-24, a weekly change of -2,468 tonnes; 09-23 was 19,088 tonnes (-1,717 tonnes) and 09-22 was 20,805 tonnes (-1,503 tonnes), three consecutive daily declines with the pace of drawdown widening, a clear signal of tight near-term spot supply in China.
The term structure confirms near-term tightness: the offshore BACKWARDATION M1-M2 is 0.0275 (0.41%), RY is 4.93%, and slope is 0.0323; the positive slope coexists with a BACK structure, indicating that spot premiums and forward discounts are present simultaneously, with the market pricing near-term supply tightness while leaving room for a recovery in forward supply.
Hindustan Copper is advancing USD 776m of capex financing (SMM, 2026-09-24), a medium- to long-term supply-side addition with limited near-term impact. China-related headlines over the past 48 hours contain only one nickel supply-chain analysis (Jian tou Nonferrous, 2026-09-24), so copper-specific catalysts are scarce and sentiment lacks fresh drivers.
Overall, the fundamentals present a mildly bullish mix of “inventory drawdown + BACK structure,” offset by the “high rates + strong dollar” macro combination, leaving the net driver neutral to slightly positive.
III. Positioning & Fund Flows
Offshore COT data show that on 2026-09-15 total open interest OI was 289,463 lots, with longs L at 83,704 lots, shorts S at 18,598 lots, and net longs net at 65,106 lots, a weekly change Δ of -17,048 lots, the largest single-week cut in four weeks. Looking back: 09-08 net longs were 82,154 lots (Δ+9,272), 09-01 were 72,882 lots (Δ-3,389), and 08-25 were 76,271 lots (Δ-2,377), showing that net longs peaked on 09-08 and have since fallen for two consecutive weeks, down about 17,048 lots in total, a clear pattern of long profit-taking.
On crowding, 2026-09-15 netPct was 22.49%, crowd was 63.36, CTA was 98, and hedge was 58.27%. Compared with 09-08 netPct of 27.62% and crowd of 69.39, both the net-long share and crowding have eased, but the CTA reading has stayed at an extreme high of 98 for four straight weeks, indicating that trend-following funds remain fully long; once price breaks below a key moving average, passive CTA deleveraging could amplify the downside slope.
Onshore positioning: SHFE Copper main contract continuous OI rose from 146,794 lots on 09-22 to 178,590 lots on 09-24, an increase of about 31,796 lots over two sessions, coinciding with the price decline, an “open-interest build on falling prices” pattern that hints at short entries in the near term.
Options and volatility: ^VIX is at 15.67 (+3.23%), offshore Vol20 is 25.8%, and ATR is 0.1298, with the volatility center drifting modestly higher. Taken together, the flow picture has shifted from “crowded longs” to “longs cutting + shorts probing”; crowding risk has partly unwound, but the elevated CTA reading remains a potential source of instability.
IV. Cross-Asset Relative Value
The copper-gold ratio HG_GC_RATIO stands at 0.0016, at the 91.27th percentile over one year (P1Y) and the 47.62nd percentile over three years (P3Y). The message is clear: on a one-year horizon copper is historically rich versus gold (91.27th percentile), reflecting that the industrial-demand narrative for copper has outpaced gold's safe-haven narrative over the past year; on a three-year horizon, however, it is only at the 47.62nd percentile, meaning the ratio has not yet broken above its medium-term center, a “rich on the short cycle, neutral on the medium cycle” setup. Should gold strengthen as real rates peak, the copper-gold ratio faces pressure to revert toward its one-year mean, i.e., a risk that copper underperforms gold.
The macro anchors for reference are ^TNX at 5.16% and DXY at 101.25; high real rates typically suppress the copper-gold ratio, and a stronger dollar reinforces that direction.
Cross-asset conclusion: the high P1Y percentile of 91.27% implies that copper has already priced much of the “reflation trade,” and a further rise in the ratio would require stronger spot tightness or inventory-drawdown data at the margin; conversely, if Treasury yields hold above 5% and the dollar index stays above 101, the probability of a downward correction in the ratio rises. For SHFE Copper, the cross-asset signal is neutral to slightly bearish and needs to be offset by the strength of inventories and the BACK structure.
V. Sentiment
Over the past 48 hours there was only one China-related headline (Jian tou Nonferrous nickel supply-chain analysis, 2026-09-24 17:38), with no copper-specific bullish or bearish catalyst; there were eight international headlines, of which one was copper-related (SMM survey of copper tube processors during the National Day holiday, 2026-09-24 18:28), with the rest concentrated in aluminum, lead, steel, and ship recycling, leaning neutral. Overall sentiment shows an “information vacuum,” with prices driven more by flows and inventory data, and limited event-driven trading opportunities.
VI. Historical Statistics
The identifiable statistical features are: DD52w of 13.49%, DD20d of 6.96%, Sharpe30 of 1.079, Vol20 of 25.8%, and VaR95 of -2.97%. These metrics show that the current price is about 13.49% below the 52-week high and about 6.96% below the 20-day high; risk-adjusted returns (Sharpe30 1.079) remain positive, but the 20-day volatility of 25.8% sits in the medium-high band, with a 95% confidence single-day loss of about 2.97%.
Patterns inferred from the available data: over the past five sessions SHFE Copper has shown “two up days and three down days, with the high stepping lower each day” (111,320 → 110,330 → 110,130), pointing to weakening short-term momentum; meanwhile, SHFE warehouse warrants have fallen for three straight days (20,805 → 19,088 → 16,620 tonnes), a short-term divergence between inventories and price that has historically converged either through a catch-up rally in price or a stabilization in inventories, with the direction yet to be confirmed.
VII. Long-Short Game Scenario Analysis
Bullish logic (no fewer than 4 points):
1) Clear inventory destocking: SHFE warrants at 16,620 tonnes, down 2,468 tonnes w/w, falling for three consecutive days with the pace of decline widening; near-term spot tightness.
2) Backwardated term structure: M1-M2 at 0.0275 (0.41%), RY 4.93%; spot premium supporting the near month.
3) Price still holds above MA20 (109372); medium-term moving average unbroken, trend not reversed.
4) International market HG=F up 2.89% over 20 days and 3.01% over 5 days; overseas resilience intact.
Bearish logic (no fewer than 4 points):
1) COT net longs down 17,048 lots w/w to 65,106 lots; longs exiting for two consecutive weeks.
2) CTA crowding at 98, an extreme high; crowd 63.36; risk of passive position cuts not yet gone.
3) Macro headwinds: ^TNX 5.16%, DXY 101.25; real yields and the dollar both elevated.
4) Copper/gold ratio at the 91.27th percentile over P1Y, relatively expensive; cross-asset cost-effectiveness declining.
5) China main contract falling on open interest build (OI 146794→178590); shorts entering in the short term.
Balance of forces: Short term (1-5 days), bears hold a slight edge as the open interest build on falling prices resonates with net long liquidation; medium term (1-3 months), longs and bears are near equilibrium, with inventory destocking and the BACK structure providing downside support — should the dollar and UST yields peak and roll over, bulls could regain the initiative. Key validation points are the hold or loss of 110490 yuan/tonne (R1) and 109372 yuan/tonne (MA20).
VIII. Trading Strategies & Risk Management
Strategy 1 (range dip-buying, LONG): Entry reference 109400-109900 yuan/tonne zone (near MA20 109372 and S1 109850), stop-loss 108600 yuan/tonne (buffer above L20 106650), targets 111800-112300 yuan/tonne (above R1 110490 up to H20 112330), horizon 1-5 trading days, position size no more than 15% of total capital, rationale: inventory destocking and BACK structure. If the close breaks below 109372 yuan/tonne, the strategy is invalidated and the position exited.
Strategy 2 (rally selling, SHORT): Entry reference 111900-112300 yuan/tonne zone (near H20 112330), stop-loss 113200 yuan/tonne, targets 110200-109400 yuan/tonne (pivot 110210 to MA20 109372), horizon 1-5 trading days, position size no more than 10% of total capital, rationale: net long liquidation and elevated CTA crowding. If the close stands above 112330 yuan/tonne, the strategy is invalidated and the position exited.
Risk management: single-trade risk exposure capped at 1.5% of total capital; ATR of roughly 0.1298 US dollar/pound implies large intraday swings — avoid full positions overnight; VaR95 at -2.97%, so reserve the corresponding margin buffer; liquidity declines ahead of the National Day and Mid-Autumn holidays, so reduce position sizes and watch the 2026-09-29 21:30 Manufacturing PMI as a directional catalyst.
IX. This Week's Data Calendar
Key events over the next 7 days: 2026-09-29 21:30 (CNY/HIGH) Manufacturing PMI — the most important macro data before the holidays, directly affecting copper demand expectations and sentiment toward RMB-denominated assets. Recommend moving positions to neutral ahead of the PMI release; after the release, decide the direction of position adds or cuts based on the actual value relative to 110490 yuan/tonne (R1) and 109372 yuan/tonne (MA20).
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.