China Desk Digest 2026-10-01

Copper: Chile supply shock meets a tight SHFE curve

Chile's August copper output fell 12.8% y/y to 369,500 tons, hit by storm after-effects and lower ore grades (INE via SMM_CN, 2026-10-01). That supply hit lands while the domestic curve is already tight: SHFE copper's Oct-Nov spread sits at 800, a 0.73% backwardation (China domestic curve, as of 2026-09-30). Front-month scarcity plus a major producer's outage keeps the near end bid. Watch whether the spread widens further as October arrivals are priced.

SHFE copper: backwardation holds at 800

The Oct-2610 contract trades at 110370 against 109570 for Nov-2611, leaving an 800 spread, or 0.73% backwardation (China domestic curve, as of 2026-09-30). The main month stayed at 2611 with no roll, so the curve's shape is clean and uncluttered by roll noise. For desks, a persistent backwardation signals nearby tightness rather than a one-day squeeze. The structure aligns with the Chilean supply disruption reported overnight.

PTA and lithium: steepest backwardations on the board

CZCE PTA's Oct-Nov spread is 356, a 5.35% backwardation, the deepest on the board (China domestic curve, as of 2026-09-30). GFEX lithium carbonate shows a 520 spread, 0.44% backwardation, with both main months at 2701 and no roll (China domestic curve, as of 2026-09-30). Such steep front premiums point to immediate physical demand outstripping nearby supply. Traders should treat these as stress signals in the prompt structure, not trend calls.

Palm oil: spread re-widens negative as declines accelerate

SunSirs put the palm oil futures Oct 1 average spread at -CNY/t 116.20, with M10 at 9,354.80 against M20 at 9,471.00 (Sina_Futures, 2026-10-01). The spread shifted from narrowing negative to re-widening, meaning the decline accelerated through the session. A re-widening negative spread flags renewed selling pressure in the near month. Desks should note the momentum shift rather than read it as a reversal.

Yangshan premiums flat; steel and gold in contango

Yangshan copper premiums were unchanged, with warehouse receipts at 119.00 and bills of lading at 114.00 (Yangshan copper premium, as of 2026-09-30). On the domestic curve, SHFE rebar sits in contango with a -58 spread, or -1.87%, while gold shows a -2.24 spread, -0.25% (China domestic curve, as of 2026-09-30). Flat premiums alongside a backwardated copper curve suggest import appetite is steady but not chasing. The contango in rebar contrasts with copper's tightness.

Data provenance

• China domestic term structure (M1-M2 spread, main contract) as of 2026-09-30
• Yangshan copper premium (USD/t) as of 2026-09-30
• China headlines, 2026-10-01