I. Price Action & Technicals
The SHFE Copper main continuous contract closed at 109620 CNY/t on September 18, 2026, up 1.3967% on the day, the largest single-day gain of the week; it closed at 108500 CNY/t on September 17 (+0.9960%) and 107740 CNY/t on September 16 (+0.7575%), forming a three-day winning streak. Earlier, it closed at 107030 CNY/t on September 15 (-1.0722%) and 107840 CNY/t on September 14 (-0.7546%), with the early part of the week under pressure at one point. The weekly low was 106650 CNY/t (L20 basis) and the 20-day high was 112330 CNY/t (H20 basis); the current price sits in the upper-middle of the 20-day range, with roughly 2.47% of room to the 20-day high and about 2.79% of buffer above the 20-day low.
The moving-average system is tangled but has initially turned bullish: on September 18, MA5 was 108146 CNY/t and MA20 was 108921 CNY/t, with the close of 109620 CNY/t above both MA5 and MA20, the first dual-line crossover since September 14; however, on September 15 MA5 (109428) was still above MA20 (108706.50), and on September 16 MA5 (108760) was almost glued to MA20 (108751), indicating that the short-term averages pressed down rapidly and then turned back up, with trend confirmation still insufficient. On the pivot system, the September 18 pivot P was 109540 CNY/t, with the close of 109620 CNY/t slightly above P; R1 was 109930 CNY/t and S1 was 109230 CNY/t, placing the price in the stronger zone between P and R1; on September 17, P was 108163.33, R1 was 108916.67 and S1 was 107746.67, with the pivot center of gravity shifting up by about 1377 CNY/t over the two days, consistent with the upward price direction.
Momentum and volatility: the report does not provide local RSI, MACD or ATR values for SHFE Copper, and the data is pending update; on the international side, the ATR for HG=F was 0.1344 USD/lb (September 18 basis), a slight decline from 0.1408 on September 17, indicating a marginal contraction in intraday range. On risk metrics, 20-day volatility Vol20 was 26.2055%, 30-day Sharpe Sharpe30 was -0.2841, the 52-week maximum drawdown DD52w was 13.4888%, the 20-day drawdown DD20d was 6.9597%, and VaR95 was -2.9712%, overall a state of medium-to-high volatility and weak risk-adjusted returns. Key levels: to the upside 109930 (R1) → 112330 (H20); to the downside 109230 (S1) → 108921 (MA20) → 106650 (L20).
II. Fundamental Drivers
Macro rates and the dollar: the US 10-year Treasury yield ^TNX printed 4.9980, up 1.03% on the day and approaching the 5% round-number threshold; the dollar index DX-Y.NYB printed 100.2200, flat on the day. Elevated rates weigh on the valuation of non-yielding assets and high-inventory commodities, but a flat dollar provided no additional directional driver. If the 10-year yield breaks decisively above 5%, the probability of pressure on copper prices via the financial-attributes channel rises; if the yield falls back below 4.8%, a recovery in risk appetite could provide support for copper prices.
Inventories and spot: LME warehouse inventories stood at 255100 t on September 18 versus 255900 t on September 17, a modest drawdown of 800 t over the two days; SHFE warrants stood at 26655 t on September 18, a weekly change of -4745 t, a notable pace of destocking; COMEX registered inventories stood at 432092.22 t on September 17. Domestic headlines show “LME copper rose for the 11th time in 12 consecutive weeks, Chinese demand rising, Yangshan copper premium hits a near four-year high” (SMM_CN, 2026-09-19); the higher Yangshan premium is consistent in direction with the 4745 t weekly decline in SHFE warrants, pointing to marginal improvement in Chinese import demand. Note, however, that absolute LME inventories remain above 250,000 t, and the elasticity constraint on prices from global visible inventories has not yet been removed.
Term structure and spreads: the international-side term structure is CONTANGO, with the M1-M2 spread at -0.0345 (-0.5181%), the far-month annualized RY at -6.2167%, and slope at 0.0327; the near-end discount structure reflects relatively tight spot conditions but of a moderate magnitude. The copper-gold ratio HG_GC_RATIO was 0.0015, at the 72.62% percentile over 1 year and the 34.52% percentile over 3 years, indicating that copper is relatively strong versus gold on a one-year horizon but still low on a three-year horizon.
Geopolitics and policy: over the past 48h, international headlines were dominated by SMM price assessment launches and supply-chain analysis, including “SMM to Launch Africa Copper Logistics Freight Assessments on September 25, 2026” and “SMM to Launch Copper Cathodes A Grade CIF Nhava Sheva Price on September 23, 2026”, with no geopolitical event directly hitting copper mine supply; among domestic headlines, electrolytic aluminum profit broke above 8000 CNY/t while coking coal and coke and rebar weakened, with a clear divergence between ferrous and base metals and a rising weight for copper's independent fundamentals.
III. Positioning and Fund Flows
Domestic positioning: SHFE Copper main continuous open interest fell for four consecutive trading days from 187828 lots on September 14 to 151880 lots on September 18, a cumulative decline of 35948 lots, or about 19.14%; over the same period, volume fell from 114364 lots to 81021 lots. The three-day price rally accompanied by continuous open interest outflow is a classic short-covering signature rather than incremental long building, which weakens the funding confirmation of the advance. If open interest subsequently recovers above 160,000 lots and the price holds 109540 (P), the credibility of the bullish structure improves; if open interest continues to slide while the price stalls, the sustainability of the rebound is questionable.
International COT: as of 2026-09-15, total non-commercial OI was 289463 contracts, with longs at 83704 contracts and shorts at 18598 contracts, for net longs of 65106 contracts, down 17048 contracts week-on-week; previously, net longs were 82154 contracts on September 8 (Δ+9272), 72882 contracts on September 1 (Δ-3389), and 76271 contracts on August 25 (Δ-2377). Net longs have declined for two consecutive weeks, and the single-week decline on September 15 was the largest in four weeks.
Crowding and options: on September 15, net long share netPct was 22.4920%, crowding crowd was 63.36, the CTA reading was 98.00, and the hedge ratio hedge was 58.2658%; versus netPct 27.6156%, crowd 69.39 and hedge 56.4599% on September 8, crowding has fallen about 6 points from its high, so the long trade is no longer extremely crowded, but a full CTA reading of 98.00 means trend-following capital remains at elevated levels, and once the price breaks below key support, the pro-cyclical pressure from programmatic de-risking cannot be ignored. The volatility proxy ^VIX printed 14.8100 (-4.08%), an option implied-volatility environment that is relatively benign, consistent in direction with the decline in HG=F's ATR.
IV. Cross-Asset Relative Value
Copper-gold ratio: HG_GC_RATIO was 0.0015, at the 72.62% percentile over 1 year and the 34.52% percentile over 3 years. This combination implies that copper has outperformed gold over the one-year window, but remains at a mid-to-low percentile over three years; if the global manufacturing cycle continues to recover, there is room for the copper-gold ratio to revert toward its three-year median; conversely, if safe-haven demand dominates, gold's relative outperformance would cap the ratio.
Gold-silver ratio and oil-gold ratio: the report's data section does not provide gold-silver or oil-gold ratio values, and the data is pending update, so this section makes no directional inference. The available alternative anchors are the dollar index at 100.2200 and the 10-year US Treasury at 4.9980, which together constitute the discount-rate constraint on USD-denominated commodities.
Copper versus ferrous divergence: domestic headlines show “Coking coal and coke collapse! Rebar breaks below 3100! Steel mills cut prices across the board!” (Sina_Futures, 2026-09-18) and “Most metals in the green, SHFE Lead, Platinum and Palladium up over 2%, SHFE Silver up nearly 4%, coking coal and coke down over 5%” (SMM_CN, 2026-09-18), with ferrous and base metals diverging and copper showing relative strength within the sector. If this divergence persists, copper's appeal for cross-commodity allocation rises; if ferrous weakness deepens further and triggers a broad contraction in risk appetite across industrial commodities, copper will not be fully immune.
V. Sentiment & Public Opinion Monitoring
Sentiment score: Weighing bullish signals — three consecutive domestic gains, Yangshan premium hitting a near-four-year high, and SHFE warrants falling 4,745 tonnes week-on-week — against bearish signals — four consecutive days of declining open interest and a 17,048-lot weekly drop in COT net longs — the current sentiment is assessed as neutral-to-bullish with moderate intensity.
Headline bias over the past 48h: Among 7 domestic headlines, the one directly bullish for copper is “LME copper posts its 11th gain in 12 weeks, Chinese demand rising, Yangshan copper premium hits a near-four-year high” (SMM_CN, 2026-09-19 17:55); the bearish or attention-diverting items are the collapse in coking coal and coke, rebar breaking below 3100, and steel mills cutting prices across the board (Sina_Futures, 2026-09-18 19:27), as well as the adjustment to lithium carbonate contract rules (GFEX_Notice, 2026-09-18 16:40). The 8 international headlines are dominated by SMM price assessment launches and supply chain analysis, with a broadly neutral directional bias. Overall, no negative shock event specific to copper has emerged in the public opinion flow.
VI. Historical Statistical Patterns
Seasonality: The data section of the report does not provide the seasonal return series for SHFE Copper over the same period (late September) in the past 10 years; the specific win rate and mean data are pending update, and this section makes no quantitative assertion.
Observable statistical characteristics: First, the current 52-week maximum drawdown DD52w is 13.4888% and the 20-day drawdown DD20d is 6.9597%; the drawdown structure shows the medium-term correction is larger than the short-term one, with price in a repair phase rather than a trend-acceleration phase. Second, the 30-day Sharpe Sharpe30 is -0.2841, a negative reading, indicating poor risk-adjusted returns over the past 30 trading days; historically, a turn positive in this reading typically requires price to hold above the 20-day moving average for consecutive sessions. Third, the 20-day volatility Vol20 is 26.2055%, in the mid-to-high range; if volatility retreats from elevated levels while price advances, this usually corresponds to a healthier trend structure. The above are descriptions of indicator statistical characteristics, not historical backtest conclusions.
VII. Long-Short Game Scenario Analysis
Bullish logic (no fewer than 4 points): 1) Price has risen for three consecutive sessions, with the September 18 close at 109620 CNY/t above MA20 (108921) and the pivot P (109540), marking a strengthening technical structure; 2) SHFE warrants at 26,655 tonnes, down 4,745 tonnes week-on-week, and the Yangshan copper premium at a near-four-year high, with marginal improvement in Chinese demand corroborated by the physical market; 3) COT crowding has fallen from 69.39 to 63.36, releasing long-crowding risk and leaving room for subsequent position building; 4) The copper-gold ratio sits at the 72.62% percentile over 1 year, showing relative-strength outperformance, and copper's sector allocation value rises against the backdrop of weakness in the ferrous complex; 5) ^VIX has fallen to 14.8100 (-4.08%), indicating no deterioration in macro risk appetite.
Bearish logic (no fewer than 4 points): 1) SHFE Copper open interest has fallen by a cumulative 35,948 lots over four days to 151,880 lots — price up, open interest down — with the rally lacking confirmation from incremental capital; 2) COT net longs fell by 17,048 lots in a single week to 65,106 lots, the largest drop in four weeks, indicating marginal retreat by trend-following capital; 3) LME inventories at 255,100 tonnes remain high in absolute terms, and the constraint from global visible inventories has not been lifted; 4) The 10-year US Treasury yield at 4.9980% is approaching 5%, with the rates side exerting persistent pressure on commodity valuations; 5) The term structure is in CONTANGO, with the far-month annualized RY at -6.2167%, and no extreme near-end squeeze signal has appeared; 6) Sharpe30 at -0.2841 means risk-adjusted returns remain negative.
Short- versus medium-term balance of forces: In the short term (1-5 days), bulls have the upper hand, based on three consecutive gains, the move above MA20 and P, and strengthening physical premiums; in the medium term (2-4 weeks), longs and shorts are close to balanced with a slight bearish tilt, based on the dual decline in open interest and COT net longs, the relatively high absolute inventory level, and unresolved rate pressure. If price holds above 109930 (R1) and open interest recovers, the medium-term balance tips bullish; if price breaks below 109230 (S1) and loses 108921 (MA20), the risk of a pullback to 106650 (L20) rises.
VIII. Trading Strategies & Risk Management
Strategy One (trend-following buy on pullback): Entry reference 109230-109540 zone (S1 to P), stop-loss 108900 (below MA20), targets 109930 (R1) as the first target and 112330 (H20) as the second target, horizon 1-5 trading days, position size recommended no more than 15% of total capital, conviction 6. Trigger condition: price pulls back without breaking S1 and intraday open interest stops falling and turns higher.
Strategy Two (range sell on rallies): If price rises to near 112330 (H20) while COT net longs fail to recover in tandem and open interest remains below 160,000 lots, consider a light short probe, entry reference 112000-112330, stop-loss above 113000, target 109540 (P), horizon 3-10 trading days, position size no more than 10% of total capital, conviction 5.
Risk management: Keep single-trade risk exposure within 1.5% of account equity; with Vol20 at 26.2055% and VaR95 at -2.9712%, reserve margin buffers for overnight positions accordingly; if the 10-year US Treasury yield breaks above 5.1% or the US dollar index breaks above 101.5, halve the long strategy; if SHFE warrants shift from declining to rising and LME inventories recover above 260,000 tonnes, the short strategy may be raised to conviction 6. All strategies are scenario hypotheses and do not constitute deterministic judgments.
IX. This Week's Data Calendar
Domestic financial calendar for the next 7 days (per the data section): 2026-09-23 03:15 France Flash Manufacturing PMI (EUR/MEDIUM), 03:15 France Flash Services PMI (EUR/MEDIUM), 03:30 Germany Flash Manufacturing PMI (EUR/MEDIUM), 03:30 Germany Flash Services PMI (EUR/MEDIUM), 04:30 UK Flash Manufacturing PMI (GBP/MEDIUM), 04:30 UK Flash Services PMI (GBP/MEDIUM). The release times for copper-directly-relevant inventory and COT data are not provided in the data section and are pending update.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.