I. Price Action & Technical Analysis
As of the close on September 24, 2026, SHFE Copper main contract continuous printed CNY 110,130, 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 advanced before fading: it closed at CNY 109,620 on September 18, up 1.4%; at CNY 110,180 on September 21, up 0.59%; and at CNY 111,320 on September 22, up 1.24%, marking a stage high. It then closed at CNY 110,330 on September 23, down 0.8%, and at CNY 110,130 on September 24, down 0.59%, giving back a cumulative ~1.07% over the two sessions.
In terms of range position, the 20-day high is CNY 112,330 and the 20-day low is CNY 106,650; the latest close of CNY 110,130 sits at roughly the 66.6th percentile of that range, about 2.0% below the 20-day high and about 3.3% above the 20-day low. MA5 stands at CNY 110,316 and MA20 at CNY 109,372; the close is ~CNY 186 below MA5 and ~CNY 758 above MA20. The short-term moving average has flattened while the medium-term average still slopes upward, consistent with a high-level, declining-volume consolidation pattern. ATR14 is CNY 1,353.6, implying an intraday range of about 1.23% against the latest close, narrower than prior periods.
On the pivot system, the September 24 pivot P is CNY 110,210, R1 is CNY 110,490, and S1 is CNY 109,850. Price is trading below the pivot, indicating short-term softness without a break of S1. Key levels are layered as follows: immediate overhead resistance is the pivot at CNY 110,210 and R1 at CNY 110,490, with a break opening the September 22 high of CNY 111,320 and the 20-day high of CNY 112,330; immediate support is S1 at CNY 109,850, below which lies MA20 at CNY 109,372, and further down the 20-day low at CNY 106,650. If price holds CNY 109,850 and reclaims CNY 110,210, the range-bound, modestly firm structure extends; a decisive break below CNY 109,372 raises the probability of a retest of CNY 106,650.
II. Fundamental Drivers
On the macro rates front, the US 10-year Treasury yield stands at 5.18%, up 0.43% on the day, an elevated absolute level that weighs on the valuation of non-yielding assets, though copper, as an industrial metal, is driven more by growth expectations. The US Dollar Index is at 100.97, down 0.32% on the day, with a softer dollar providing marginal support to dollar-denominated copper. The divergence between rates and the dollar suggests the market is repricing the balance between growth and inflation; copper's sensitivity to higher rates is currently lower, on a phase basis, than its sensitivity to dollar weakness.
Inventories show an onshore-offshore split. LME warehouse stocks were reported at 251,500 tonnes on September 25 and 251,175 tonnes on September 24, still high in absolute terms; COMEX registered inventory was 432,818 tonnes on September 24; SHFE warrants stood at 16,620 tonnes on September 24, down 2,468 tonnes on the week, extending China's destocking. The coexistence of low Chinese warrants and high open interest — 178,590 lots of open interest against 16,620 tonnes of warrants — leaves the paper-to-physical ratio tight, a potential support for near-month contracts.
On supply, Peru's mining minister said this year's copper output is expected to be between 2.50 and 2.70 million tonnes (SMM_CN, 2026-09-26 11:45:00), a neutral supply-side comment. Geopolitically, ArcelorMittal suspended output at its Kryvyi Rih steel plant following Russian strikes (SMM_EN, 2026-09-26 20:35:00); the direct impact on copper demand is limited, but it reflects lingering supply-chain disruption risk.
On term structure, the international curve is in CONTANGO, with M1-M2 at -0.034 (-0.5%) and far-month annualized RY at -6.06%, slope 0.0339; the near-month discount indicates the spot end is not tight, in contrast to China's low warrants — an onshore-offshore arbitrage window worth tracking.
III. Positioning & Fund Flows
COT positioning shows that, as of September 22, 2026, total international open interest was 301,657 lots, with 96,421 lots long, 13,899 lots short, and net long of 82,522 lots, up 17,416 lots on the week. The prior week (September 15) saw net long of 65,106 lots, down 17,048 lots on the week; September 8 net long was 82,154 lots and September 1 net long was 72,882 lots. Net length has re-expanded after two weeks of consolidation, with a clear build in longs.
On crowding, the September 22 net-long share was 27.36%, crowding 69.05, CTA percentile 98, and hedge share 56.61%. By comparison, September 15 showed a net-long share of 22.49% and crowding of 63.36, while September 8 showed a net-long share of 27.62% and crowding of 69.39; the current net-long share has recovered to near the prior high, with the CTA percentile persistently in the extreme zone at 98. This implies trend-following capital is already heavily long, limiting the room for marginal incremental buying; should price break below a key moving average, CTA liquidation could amplify the downside slope.
On Chinese positioning, SHFE Copper main contract continuous open interest rose from 146,794 lots on September 22 to 178,590 lots on September 24, an increase of about 31,796 lots over two sessions, while price declined — pointing to growing two-way disagreement rather than one-sided exit. International HG=F open interest percentile stands at 89.3%, in the high zone.
IV. Cross-Asset Relative Value
The Copper/Gold ratio (HG_GC_RATIO) is at 0.0016, with a 1-year percentile of 90.87% and a 3-year percentile of 47.49%. The high 1-year percentile indicates copper has materially outperformed gold over the past year; the 3-year percentile of only 47.49%, near the midpoint, shows the ratio is not extreme over a longer horizon. On mean-reversion logic, the high 1-year percentile implies downward repair pressure on copper relative to gold, i.e., gold has catch-up room versus copper; on momentum logic, the ratio remains in an uptrend and copper's relative strength has yet to signal a turn. Where the two conflict, the 3-year mid-percentile should serve as the anchor — the ratio is not systematically overvalued, and short-term momentum still dominates.
The US Dollar Index at 100.97 fell 0.32%, providing negatively correlated support to copper. The 10-year Treasury yield at 5.18% rose 0.43%, weighing on the copper/gold ratio, as gold is more sensitive to real rates. VIX stands at 14.87, down 5.11%, with risk appetite in a low-volatility band — broadly neutral for industrial metals.
On risk metrics, the 52-week maximum drawdown is 13.49%, the 20-day maximum drawdown 7.03%, Sharpe30 is 1.053, VaR95 is -2.97%, and 20-day volatility is 24.89%. Volatility is at a moderate level, consistent with the ATR14 contraction, suggesting the market is reducing exposure ahead of PMI data.
V. Sentiment
Two China-related headlines in the past 48 hours: first, “Precious metals, oil fall on the week; international metals broadly lower; LME tin up over 1%, LME zinc down nearly 2%; US stocks rise [Holiday market recap]” (SMM_CN, 2026-09-26 17:50:00) — broad weakness in international metals is bearish for China's opening sentiment; second, “Peru mining minister: Peru's copper output this year is expected to be between 2.50 and 2.70 million tonnes” (SMM_CN, 2026-09-26 11:45:00) — a neutral supply-side comment.
Two international headlines: “[SMM Analysis] A New Variable in Zimbabwe's Lithium Mining” (SMM_EN, 2026-09-27 21:02:09) and “[ArcelorMittal Halts Kryvyi Rih Steel Mill Output After Deadly Russian Strikes” (SMM_EN, 2026-09-26 20:35:00); the former has low relevance to copper, while the latter reflects geopolitical disruption. Overall sentiment leans neutral-to-bearish, with no one-sided driver, as the market awaits the September 30 PMI data for direction.
VI. Supply Chain & Seasonal Inventory (Historical Statistics)
Locating the current price against historical percentiles: the copper/gold ratio's 1-year percentile of 90.87% is high for the past year, while the 3-year percentile of 47.49% is mid-range, indicating copper's current strength versus gold is a one-year phenomenon rather than a three-year extreme. International HG=F open interest percentile at 89.3% is elevated, corroborating the COT crowding of 69.05 and CTA percentile of 98 — positioning is crowded.
On the price range, SHFE Copper's 20-day high is CNY 112,330 and low CNY 106,650; the current CNY 110,130 sits at the 66.6th percentile, in the upper-middle of the range. The 52-week maximum drawdown of 13.49% shows a deep adjustment occurred over the past year, and the current price remains some distance from the 52-week high; the 20-day maximum drawdown of 7.03% indicates the recent pullback is contained.
On spread Z-scores, the CONTANGO term structure shows M1-M2 at -0.034 (-0.5%) and far-month annualized at -6.06%, with the near-month discount in a mild state and no extreme distortion. SHFE warrants fell 2,468 tonnes on the week to 16,620 tonnes, and the destocking slope provides positive support to the near month. Taken together, the combination of price in the upper-middle of the range, crowded positioning, and tight-onshore/loose-offshore inventory has historically required macro data to break the balance.
VII. Long-Short Scenario Analysis
Bull case: First, SHFE warehouse warrants stand at 16,600 tonnes, down 2,460 tonnes w/w, as China destocking continues; low warrant levels support the near month. Second, the close at CNY 110,130 holds about CNY 758 above the MA20 at CNY 109,372, with medium-term moving averages still sloping upward. Third, COT net longs at 82,522 lots rose 17,416 lots w/w, as long capital re-enters. Fourth, the dollar index at 100.97 fell 0.32%, a marginal tailwind for pricing. Fifth, VIX at 14.87 fell 5.11%, leaving risk appetite intact.
Bear case: First, two consecutive down closes on September 23 and 24 gave back a cumulative ~1.07%, with short-term momentum weakening. Second, CTA percentile at 98 and crowding at 69.05 indicate elevated long crowding, limiting marginal buying. Third, LME inventories at 251,500 tonnes remain high in absolute terms, with no tightness in the international physical market. Fourth, the term structure is in CONTANGO, with the near month at a -0.5% discount, so there is no squeeze pressure on the spot side. Fifth, the 10-year UST yield at 5.18% rose 0.43%, pressuring valuations.
Short- vs medium-term balance: Short term (1–5 days), long and short forces are near equilibrium, with price below the pivot at CNY 110,210 and above S1 at CNY 109,850; direction is undecided. Medium term (1–4 weeks), China destocking and low warrants lean supportive, but high international inventories and high crowding cap upside. The dense release of China and US PMIs on September 30 is the key variable to break the balance: if China's manufacturing PMI delivers the expected 50.1, the bullish structure strengthens; if it misses, the odds rise of a retest of the MA20 or even the 20-day low.
VIII. Trading Strategies & Risk Management
The primary strategy is to buy on a pullback. Entry at CNY 109,850, i.e. the September 24 S1 level; stop-loss at CNY 108,400; target CNY 112,300; horizon 1–5 trading days; position size capped at 15% of total capital. Entry logic: CNY 109,850 is the confluence of the pivot system's S1 and short-term support, with the MA20 at CNY 109,372 below it as a second line of defense; if price retraces into this zone, stabilizes, and reclaims the CNY 110,210 pivot, the range-bound-to-firm structure extends, with the target at the 20-day high of CNY 112,300.
Invalidation: If price effectively breaks below the CNY 108,400 stop-loss, the MA20 support has failed and the bullish structure is broken; exit to the sidelines and wait for price to rebuild support near CNY 106,650. The reverse scenario serves only as an invalidation condition; no separate reverse strategy is set. If price does not pull back to CNY 109,850 and instead breaks directly above CNY 112,300, this strategy does not trigger; do not chase.
IX. This Week's Data Calendar
Beijing 2026-09-28 Mon 09:30 / New York 2026-09-27 Sun 21:30 [CNY/MEDIUM] Industrial Profits ytd/y.
Beijing 2026-09-30 Wed 09:30 / New York 2026-09-29 Tue 21:30 [CNY/HIGH] Manufacturing PMI, expected 50.1, prior 49.8.
Beijing 2026-09-30 Wed 09:30 / New York 2026-09-29 Tue 21:30 [CNY/HIGH] Non-Manufacturing PMI, expected 49.3, prior 49.0.
Beijing 2026-09-30 Wed 09:45 / New York 2026-09-29 Tue 21:45 [CNY/HIGH] RatingDog Manufacturing PMI, expected 51.7, prior 51.5.
Beijing 2026-09-30 Wed 09:45 / New York 2026-09-29 Tue 21:45 [CNY/HIGH] RatingDog Services PMI, expected 51.2, prior 51.4.
Beijing 2026-09-30 Wed 21:45 / New York 2026-09-30 Wed 09:45 [USD/MEDIUM] Chicago PMI SEP, expected 51.3, prior 47.1.
Beijing 2026-10-01 Thu 07:01 / New York 2026-09-30 Wed 19:01 [CNY/LOW] Bank Holiday.
Beijing 2026-10-01 Thu 22:00 / New York 2026-10-01 Thu 10:00 [USD/MEDIUM] ISM Manufacturing PMI, expected 55.0, prior 54.6.
Beijing 2026-10-02 Fri 07:01 / New York 2026-10-01 Thu 19:01 [CNY/LOW] Bank Holiday.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.