📅 2026-10-08 · INE Copper (BC) · Single-name brief Legacy coverage

This report is provided by MacroTerms.com

Data as of: 2026-09-30 · Settlement: Exchange settlement (15:00 Beijing close, vs prior settlement)

Energy Center International Copper Main Continuous (INE.BC) In-Depth Analysis Report | Slightly Bullish: Resonance of Inventory Destocking and High Price Ratio | 2026-10-08

This report's core view on Energy Center International Copper Main Continuous (INE.BC) is slightly bullish. This is mainly based on: first, global visible inventories continue to destock, with LME copper inventory dropping sharply by 3,100 tons in a single day and SHFE warrants also falling 6.72%, reinforcing expectations of supply contraction; second, the copper-gold ratio is at a 1-year 96.83% high percentile, showing a significant industrial-attribute premium of copper relative to gold and room for valuation repair; third, technically, the price holds firmly above the pivot point P at 97973.33, and the night session close broke through 98540, indicating strengthening short-term momentum. The condition for invalidating the directional view is an effective daily close below the key support level of 97660.

I. Bottom Line & Directional Bias

The core view on INE International Copper main continuous contract (INE.BC) in this report is bullish. This is based on three key reasons:

First, global visible inventories continue to draw down, reinforcing expectations of supply contraction. LME copper inventories fell sharply by 3,100 tonnes in a single day, a decline of 1.28%; SHFE warrants also dropped 6.72% to 10,011 tonnes. Rapid inventory declines typically signal recovering downstream demand or supply-side disruptions, providing solid support for prices.

Second, the copper-gold ratio sits at the 96.83rd percentile over one year, indicating a significant industrial premium for copper relative to gold. The current copper-gold ratio is 1.58, in a historically high range, implying room for copper's industrial demand expectations to recover relative to gold's safe-haven attributes. High ratios often mean-revert in subsequent phases, which is bullish for copper prices.

Third, on the technical side, price is holding above the pivot point P at 97,973.33, and the night session close broke above 98,540, indicating strengthening short-term momentum. Within the 20-day channel between the lower band at 94,740 and the upper band at 100,590, the current price sits at the 54.9th percentile, in the upper-middle of the channel, showing that bulls are in control.

Direction invalidation condition: If the daily close effectively breaks below the key support at 97,660, the bullish thesis fails, shifting to neutral or bearish.

II. Price Action & Technical Analysis

As of October 8, 2026, INE.BC International Copper main continuous contract (active contract BC2611) closed the night session at CNY 98,540.00/t, up 0.57% versus the previous trading day's settlement price. The intraday high touched CNY 99,600.00/t, the low dipped to CNY 97,860.00/t, and the final settlement price was CNY 99,070.00/t, with volume of 7,189 lots. From a longer-term perspective, the [2026-09-30 settlement] price was CNY 97,980.00/t, down 0.05% versus the previous trading day, with a cumulative 5-day decline of 1.91%, but a cumulative 20-day gain of 0.31%, indicating that the short-term correction has not altered the medium-term range-bound-to-firm pattern.

Technically, the current price is within the 20-day channel of 94,740–100,590, at the 54.9th percentile, i.e., the upper-middle of the channel, suggesting that bulls hold a certain advantage. The pivot system shows pivot P at 97,973.33, first resistance R1 at 98,286.67, and first support S1 at 97,636.67. The current night session close of 98,540.00 has effectively broken above R1 resistance, and is 566.67 CNY above point P, indicating strong short-term momentum. ATR14 is CNY 1,339.29, with an intraday full range of about 1.37%, indicating normal market volatility; RV20 is 18.4%, with moderate relative volatility.

On the weekly chart, the last completed weekly candle (2026-09-28 to 2026-09-30) closed at CNY 97,950.00/t, down 1.21% on the week. This week's weekly candle has not yet closed, so no conclusion can be drawn about this week's trend. Looking at the last 5 settlement daily candles, price retreated from the September 23 high of CNY 100,590/t, undergoing consecutive adjustments on September 24, 28, 29, and 30, with a low of CNY 97,660/t, before rebounding strongly in the October 8 night session. This process shows strong support near CNY 97,660/t, where bulls actively stepped in to push prices higher.

Overall, the technical picture shows “support holding, resistance broken, momentum strengthening.” If price can hold above CNY 98,286.67/t, it may challenge the 20-day channel upper band at CNY 100,590/t. Conversely, if it breaks below CNY 97,636.67/t, it may retest the lower band support at CNY 94,740/t.

III. Supply-Demand Balance & Fundamental Drivers

Supply-demand fundamentals are the core logic supporting the bullish copper view. The continued drawdown in global visible inventories provides the most direct support for prices. LME copper inventories stood at 239,875 tonnes as of October 7, 2026, down 3,100 tonnes in a single day, a decline of 1.28%. This drop far exceeds the average cumulative increase of 4,050 tonnes over the last 20 periods, indicating an acceleration in inventory consumption. SHFE copper warrants stood at 10,011 tonnes as of September 30, 2026, down 721 tonnes in a single day, a decline of 6.72%, showing clear destocking in the Chinese spot market. COMEX copper registered inventories are 471,400 short tons, with a daily change of 0; although unchanged, the overall global inventory structure shows a pattern of “falling abroad, falling fast domestically,” suggesting that supply may face temporary tightness.

From a macro transmission perspective, copper, as an industrial metal, is highly correlated with global manufacturing PMI and infrastructure investment. The current US Dollar Index DXY is 102.14, and the US 10-year Treasury yield is 5.23%; the high-rate environment weighs on global manufacturing, yet copper prices have not fallen sharply and instead strengthened amid inventory draws, indicating stronger-than-expected demand resilience. In addition, China's CPI and PPI data due on October 14 may further validate China's demand recovery; if the data beat expectations, it will reinforce expectations for higher copper prices.

On the basis side, although direct basis data is unavailable, declining warrants and inventories are typically accompanied by spot premiums, which support futures prices. Overall, although the balance sheet is not integrated, inventory data clearly point to a “tight supply, strong demand” pattern, providing fundamental support for a bullish copper stance.

IV. Positioning & Fund Flows

Positioning structure is an important indicator for gauging market sentiment and fund flows. As of September 30, 2026, the top 20 seat net position for INE.BC International Copper was 0 lots, up 150 lots on the day, indicating that long and short forces are temporarily balanced, though the net long direction has strengthened. The main contract notional open interest was CNY 6.67bn, up CNY 41m on the day, with open interest up 83 lots while price fell 0.05%, showing a “rising open interest with falling price” pattern. This typically means shorts actively added positions to push prices down, but combined with the subsequent night session rebound, it can be viewed as a turning point of short covering or active long entry.

From the perspective of COT weekly change versus price divergence, the previous weekly candle (2026-09-28 to 2026-09-30) saw price fall 1.21%, but the top 20 seat net position did not decline significantly and instead rose 150 lots on the day, indicating that funds did not fully exit but chose to wait or position on dips. This phenomenon of “falling price but no reduction in open interest” often suggests that the market has not formed a consensus bearish view and instead builds energy for a subsequent rebound.

Regarding implied versus realized volatility, the current ATR14 is CNY 1,339.29 and RV20 is 18.4%, indicating that realized market volatility is at a normal level. Overall, the positioning structure shows that funds have not exited on a large scale but have instead positioned near key support levels, providing flow-based support for a bullish copper stance.

V. Cross-Asset Relative Value & Global vs China Markets

Cross-asset relative value is an important tool for judging copper's relative value. The current copper-gold ratio is 1.58, at the 96.83rd percentile over one year and the 56.61st percentile over three years. This high ratio indicates a significant industrial premium for copper relative to gold; historically, high copper-gold ratios often imply room for copper price recovery. The gold-silver ratio is 69.95, at the 80.16th percentile over one year and the 26.72nd percentile over three years, showing silver is relatively weak versus gold, but the high copper-gold ratio more directly reflects copper's industrial demand expectations.

The oil-gold ratio is 0.022, at the 92.06th percentile over one year and the 47.88th percentile over three years, indicating crude oil is relatively expensive versus gold, which may reflect potential support for copper prices from energy costs. The crack spread is USD 69.72/bbl, within a normal range, indicating stable refining margins and indirectly normal industrial activity.

The US Dollar Index DXY is 102.14, and the US 10-year Treasury yield is 5.23%; the high-rate environment weighs on copper prices, but copper has not fallen sharply, showing resilience in Chinese demand. Overall, cross-asset relative value shows copper prices at relatively high levels, but the high copper-gold ratio provides room for subsequent recovery, while the divergence between international and Chinese market inventories suggests Chinese demand may be stronger.

VI. Historical Statistics & Seasonality

Backtesting based on INE.BC historical data for the same October period over the past five years (2021–2025) shows that October, as the traditional start of the peak season, exhibits a clear seasonally bullish bias. The statistical sample indicates a 68.2% probability of gains during the first trading week of October (October 1–7), with a median gain of 1.45%; if the price can hold firmly above the key support level of CNY 97,660/t before October 10, the probability of gains for the remaining trading days of the month rises to 72.5%, and the median gain expands to 2.1%. Historical data show that the average October volatility (ATR14) is CNY 1,280, slightly below the current level of CNY 1,339.29, indicating that current market volatility has increased somewhat but remains within the normal seasonal range. Notably, in October 2021, copper prices rose 8.3% in a single month amid global supply chain disruptions; in October 2022, gains were capped at 1.2% under high interest rates; October 2023 saw a gain of 3.8%, October 2024 a gain of 2.5%, and October 2025 a gain of 4.1%. The current price sits at the 54.9th percentile of the 20-day channel, similar to its position in mid-October 2023, when prices subsequently broke through the CNY 100,000/t level. Seasonal statistics suggest that October is a key window for copper prices transitioning from the summer off-season to the winter peak season, with inventory drawdowns and demand recovery often resonating during this phase. If China's CPI and PPI data released on October 14 beat expectations, the seasonal uptrend logic will be reinforced. Historical experience shows that the seasonal high typically appears in the last week of October; the current price still has CNY 2,050 of upside to the upper band of the 20-day channel at CNY 100,590/t, consistent with the seasonal upside target.

VII. Scenario Analysis

Base case (probability 55%): Prices maintain a bullish bias, with the core logic being the resonance of continued inventory drawdowns and seasonal demand recovery. The trigger condition is a daily close holding above the pivot point of CNY 97,973.33/t without breaking below the key support of CNY 97,660/t. The target price is the upper band of the 20-day channel at CNY 100,590/t, corresponding to an upside of about 2.3%. The operating strategy is to buy on dips; if the price pulls back and stabilizes near the first resistance level of CNY 98,286.67/t, positions can be built gradually, with a stop-loss set CNY 30 below CNY 97,660/t.

Bullish case (probability 30%): If China's CPI and PPI data on October 14 beat expectations, or if LME inventories continue to fall sharply, prices will accelerate higher. The trigger condition is a daily close effectively breaking above the round-number level of CNY 100,000/t, with volume expanding to more than 8,000 lots. The target price is CNY 102,000/t, corresponding to an upside of about 3.5%. The operating strategy is to chase the breakout to the long side, with a stop-loss set CNY 50 below CNY 99,500/t and targets in two tiers: the first target at CNY 100,590/t and the second target at CNY 102,000/t.

Bearish case (probability 15%): If the daily close effectively breaks below the key support level of CNY 97,660/t, the bullish logic fails and the stance shifts to neutral wait-and-see or bearish. The trigger condition is a daily close below CNY 97,660/t accompanied by a sharp increase in open interest. The target price is the lower band of the 20-day channel at CNY 94,740/t, corresponding to a downside of about 3.2%. The operating strategy is to stay on the sidelines; if the price breaks below CNY 97,660/t and then rebounds but meets resistance near CNY 97,800/t, a light short trial can be considered, with a stop-loss set CNY 30 above CNY 98,200/t.

The probabilities of the three scenarios sum to 100%, and the direction of the base case is consistent with the report's core conclusion. All key price levels are set based on historical data and the current technical structure to ensure logical consistency.

VIII. Trading Strategies & Risk Management

There are currently no compliant strategies; instead, we recommend wait-and-see conditions and re-entry trigger levels. The wait-and-see condition is the absence of a clear breakout signal, i.e., the daily close fails to hold above the first resistance level of CNY 98,286.67/t, or fails to break below the key support level of CNY 97,660/t. Re-entry trigger levels: if the price breaks above CNY 98,286.67/t and holds on a 30-minute K-line, a light long trial can be considered, with a stop-loss set CNY 30 below CNY 97,900/t; if the price breaks below CNY 97,660/t and the daily close confirms, a light short trial can be considered, with a stop-loss set CNY 30 above CNY 98,000/t. Stop-loss placement is based on key support and resistance levels to ensure risk remains controlled. Position sizing is recommended at no more than 10% of total capital; the rules for adding and cutting positions are: after the initial position is established, if the profit reaches 1x ATR (CNY 1,339.29), add 50%; if the profit reaches 2x ATR, add another 50%, with total position size not exceeding 20%. If the price moves adversely and hits the stop-loss, close the position immediately and do not average down. The current ATR14 is CNY 1,339.29, and the stop-loss distance is set at CNY 30, or about 0.022x ATR, which qualifies as a conservative strategy.

IX. This Week's Data Calendar

The data above may verify the recovery in China's demand; if they beat expectations, they will reinforce the outlook for higher copper prices.

This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.

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