I. Price Action & Technical Analysis
As of 2026-09-24, SHFE Copper main continuous contract closed at CNY 110,130/t, down 0.59% on the day, with volume of 73,438 lots and open interest of 178,590 lots. Over the past five trading sessions, the market has traced a rally-and-retreat pattern: it closed at CNY 109,620/t on September 18 (+1.4%), at CNY 110,180/t on September 21 (+0.59%), spiked intraday to CNY 111,320/t on September 22 (+1.24%) but failed to hold those gains, retreated to CNY 110,330/t on September 23 (-0.8%), and probed further down to CNY 110,130/t on September 24. The weekly high of CNY 111,320/t together with the 20-day high of CNY 112,330/t forms an overhead resistance band, while the 20-day low of CNY 106,650/t serves as a medium-term support reference.
On the moving-average front, as of September 24 the MA5 stood at CNY 110,316/t and the MA20 at CNY 109,372/t; the close of CNY 110,130/t sits below the MA5 but above the MA20, with the short-term average turning down while the medium-term average still slopes higher — a signature of a weakening bullish alignment. The pivot point P is CNY 110,210/t, first resistance R1 is CNY 110,490/t, and first support S1 is CNY 109,850/t; the current price is trading just below the pivot, biasing the short term to the downside.
Against the international benchmark, HG=F closed at USD 6.696/lb on 2026-09-25 (-0.34%), up 2.37% over five days and 2.8% over twenty days, with pivot P at 6.765, R1 at 6.804, S1 at 6.733, ATR at 0.1274, open interest of 174,125 lots, and intraday volume of only 38 lots (low liquidity, limited reference value). ATR has gradually compressed from 0.1343 on September 21 to 0.1274, signaling volatility contraction and an imminent directional choice.
Judging from the price-versus-moving-average relationship and two consecutive down days, short-term momentum indicators will most likely roll over from overbought territory. Risk metrics show a 52-week drawdown of 13.49%, a 20-day drawdown of 6.96%, a 30-day Sharpe of 0.9897, VaR95 of -2.97%, and 20-day volatility of 25.45%, placing the market in a medium-to-high volatility regime. Key levels: if price holds above 109,850 (S1) and reclaims 110,490 (R1), it may retest 112,330 (the 20-day high); a break below 109,372 (MA20) would open the next support at 106,650 (the 20-day low).
II. Fundamental Drivers
At the macro level, the dollar index DX-Y.NYB stood at 101.04 on 2026-09-25, down 0.25% on the day; a softer dollar is marginally supportive for USD-denominated copper. However, the US 10-year Treasury yield ^TNX rose 0.43% to 5.184, and elevated real rates weigh on the valuation of non-yielding assets and industrial metals, leaving macro signals mixed.
On inventories, as of 2026-09-24 SHFE copper warrant stocks stood at 16,620 tonnes, down 2,468 tonnes on the week; LME copper inventories were 251,175 tonnes (2026-09-24) versus 252,500 tonnes the prior day (2026-09-23). Continued destocking of Chinese warrants lends support to near-month contracts, but absolute LME stocks remain above 250k tonnes, so global visible-inventory pressure has not fully eased. The inventory-price divergence warrants close tracking; if destocking persists, the floor under prices strengthens.
On supply, China headlines over the past 48 hours show that Escondida in Chile, the world's largest copper mine, is evaluating a phased restart plan (SMM_CN, 2026-09-25 16:03:00); if the restart materializes, mine-side supply expectations would improve, a potential headwind for copper prices. Internationally, Zambian copper growth faces sulfuric-acid shortages (SMM_EN, 2026-09-25 16:43:54), Indian copper producers are seeking a GST cut to ease working-capital pressure amid record prices (SMM_EN, 2026-09-25 20:26:57), and the critical-minerals boom faces second-round funding-gap risk as governance support shrinks (Mining_Copper, 2026-09-25 20:35:09). Supply-side disruptions and restart expectations coexist, leaving the directional impact neutral-to-bearish.
On demand, China's September manufacturing PMI is due on 2026-09-29 at 21:30 (CNY/HIGH), the most critical demand-side validation point next week. Taken together, fundamentals present a three-way tug-of-war: low-inventory support, restart-expectation pressure, and elevated macro rates.
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, net long net was 65,106 lots, and the weekly change Δ was -17,048 lots — the largest single-week decline in four weeks. Looking back over the prior three weeks: net longs were 82,154 lots on September 8 (Δ+9,272), 72,882 lots on September 1 (Δ-3,389), and 76,271 lots on August 25 (Δ-2,377). Net longs have fallen consecutively from the September 8 peak of 82,154 lots to 65,106 lots, a cumulative reduction of 17,048 lots, confirming clear long liquidation.
On crowding, as of 2026-09-15 the net-long share netPct was 22.49%, crowding crowd was 63.36, CTA positioning was 98, and the hedge ratio hedge was 58.27%. Compared with September 8 (netPct 27.62%, crowd 69.39), both the net-long share and crowding have receded in tandem, indicating easing long-side congestion, though CTA positioning remains elevated at 98, so trend-following capital has not yet turned.
On the China side, SHFE Copper main continuous open interest rose from 146,794 lots on September 22 to 178,590 lots on September 24, a cumulative two-day increase of 31,796 lots; with prices falling over the same window, the open-interest build on declining prices suggests short capital entering or increased hedging supply. Volume peaked at 91,942 lots on September 22 and shrank to 73,438 lots on September 24, a contraction in trading momentum.
On options and volatility, ^VIX stood at 14.87 on 2026-09-25, down 5.11% on the day, indicating subdued market fear. In sum, international long liquidation combined with China's open-interest build on falling prices leaves fund flows short-term bearish, though the decline in crowding also reduces the risk of a stampede.
IV. Cross-Asset Relative Value
The copper-gold ratio HG_GC_RATIO stands at 0.0016, with a 1-year percentile P1Y of 90.87% and a 3-year percentile P3Y of 47.62%. The ratio sits in the top decile on a 1-year horizon (90.87%), meaning copper has been expensive relative to gold over the past year; mean reversion would imply downside pressure on copper versus gold. However, the 3-year percentile is only 47.62%, so the medium-term reading is not extreme, leaving the ratio signal split across horizons.
On term structure, the international curve is in a FLAT configuration, with the M1-M2 spread at -0.003 (-0.04%), roll yield RY at -0.54%, and slope at 0.0368. The near-month discount is minimal and the curve is nearly flat, showing neither the spot tightness of deep backwardation nor the surplus pressure of a pronounced contango, reflecting a balanced supply-demand picture.
On cross-asset linkage, the weaker dollar index at 101.04 is theoretically supportive for copper, but the elevated 10-year Treasury yield at 5.184 caps risk-asset valuations, leaving the copper-dollar-rates triangle in a fragile equilibrium. The combination of a high copper-gold percentile and a flat term structure suggests that further copper upside requires demand-side data validation rather than reliance on financial attributes alone.
V. Sentiment
Based on available information, ^VIX at 14.87 (-5.11%) points to a warm global risk appetite, but copper itself lacks a strong catalyst.
Headline bias over the past 48 hours: on the China side, Escondida's evaluation of a phased restart (SMM_CN, 2026-09-25) skews bearish on mine-supply recovery expectations. Internationally, of eight headlines, Zambia's sulfuric-acid shortage constraining copper growth is bullish, Indian copper producers seeking a GST cut is neutral-to-bearish (reflecting demand suppression at high prices), critical-minerals funding-gap risk is neutral-to-bearish, and rare-earth and lithium-related reports have low direct relevance to copper. Overall headline bias is neutral-to-bearish, with supply-recovery narratives and demand-cost pressure narratives coexisting and no strong one-sided catalyst in sight.
VI. Historical Statistics
Limited inference based on available information: the market is currently in late September, the traditional “Golden September, Silver October” consumption window, yet September 2026 prices have oscillated at elevated levels rather than trending higher, with the true strength of the peak season awaiting validation by the September 29 manufacturing PMI. Over the past five sessions, prices rose for three consecutive days from September 18 to September 22 (a cumulative gain of roughly 3.2%) before giving back gains over the following two days, a “three up, two down” weekly rhythm with short-term mean-reversion characteristics. The 20-day high of 112,330 and low of 106,650 define a range roughly 5,680 CNY/t wide; at current volatility, the market is likely to remain range-bound until a breakout occurs. Cross-validation of seasonality against the destocking pace requires additional historical data before confirmation.
VII. Long-Short Scenario Analysis
Bullish logic: (1) SHFE warrant inventory at 16,620 tonnes, down 2,468 tonnes on the week; sustained destocking of low inventories supports the near month; (2) the US Dollar Index at 101.04 fell 0.25% on the day, and a weaker dollar is supportive for USD-denominated copper; (3) the closing price of CNY 110,130/t remains firmly above the MA20 (109,372), with the medium-term moving average unbroken; (4) COT crowdedness has eased from 69.39 to 63.36, releasing long-crowding risk and creating room for further upside; (5) supply disruptions such as the sulfuric acid shortage in Zambia provide thematic support.
Bearish logic: (1) COT net longs have fallen from 82,154 lots to 65,106 lots, a single-week cut of 17,048 lots, as long capital continues to exit; (2) Escondida is evaluating a gradual restart, and expectations of recovering mine supply weigh on prices; (3) the 10-year UST yield is elevated at 5.184, with real rates pressuring industrial metals valuations; (4) the copper/gold ratio sits at the 90.87th percentile over one year, a high percentile, leaving relative valuation expensive; (5) China main-contract open interest rose 31,796 lots over two days while prices fell, an open interest build on declining prices, which is bearish; (6) the term structure is FLAT with a roll yield of -0.54%, offering no signal of spot tightness.
Short- vs medium-term balance: Short term (1–5 days), bears hold a slight edge, with prices below pivot P (110,210), two consecutive down candles, and long-position cuts on international markets; medium term (1–3 months), longs and bears are balanced, with low inventories and a weak dollar offsetting restart expectations and high rates. The key trigger for directional choice is the September 29 manufacturing PMI: a beat would restore bullish momentum, while a miss would put the box-range floor at 106,650 to the test.
VIII. Trading Strategies & Risk Management
Strategy 1 (range dip-buying, LONG): entry reference CNY 109,850/t (near S1), stop-loss CNY 109,300/t (below the MA20), target CNY 111,300/t (near the weekly high), horizon 1–5 days, position size capped at 15% of total capital, conviction 6. Logic: the MA20 support is holding and inventories are drawing, aiming for a rebound from the lower end of the range.
Strategy 2 (rally selling, SHORT): entry reference CNY 110,490/t (near R1), stop-loss CNY 111,000/t (above R1), target CNY 109,400/t (near the MA20), horizon 1–5 days, position size capped at 15% of total capital, conviction 6. Logic: consecutive down candles, long-position cuts on international markets, and an open interest build on falling prices, aiming for a pullback below the pivot.
Risk management: keep single-trade risk exposure within 2% of total capital; if prices effectively break above 112,330 (20-day high) or below 106,650 (20-day low), the range strategy fails—exit at stop-loss and await confirmation of a new trend; reduce positions around the September 29 PMI release to avoid event volatility; VaR95 is -2.97%, which sets the maximum tolerable single-day drawdown.
IX. This Week's Data Calendar
| Date | Time | Event | Importance |
|---|
| 2026-09-29 | 21:30 | China September Manufacturing PMI (CNY/HIGH) | High |
The manufacturing PMI is the core trigger for next week's copper price direction; prioritize tracking it.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.