I. Price Action & Technical Analysis
SHFE Copper main contract closed at 110,330 CNY/t on September 23, down 0.8% on the day, with volume of 68,955 lots and open interest of 171,175 lots. The prior four trading sessions posted consecutive gains: September 22 closed at 111,320 CNY/t, up 1.24%; September 21 closed at 110,180 CNY/t, up 0.59%; September 18 closed at 109,620 CNY/t, up 1.4%; September 17 closed at 108,500 CNY/t, up 1%. Over the past 5 sessions, price rose from 108,500 CNY/t to 110,330 CNY/t, a gain of approximately 1.69%.
The moving average system shows a bullish alignment: on September 23, MA5 stood at 109,990 CNY/t and MA20 at 109,280.5 CNY/t, with the close of 110,330 CNY/t above both, and MA5 above MA20, indicating a stronger short-term trend. The 20-day high H20 was 112,330 CNY/t and the 20-day low L20 was 106,650 CNY/t; the current price sits in the upper-middle of the range, about 1.78% below the high and about 3.45% above the low.
On the pivot system, the September 23 pivot P was 110,603.3 CNY/t, first resistance R1 was 110,956.7 CNY/t, and first support S1 was 109,976.7 CNY/t. The close of 110,330 CNY/t sat about 0.25% below P and about 0.32% above S1, indicating bulls and bears contested below the pivot on the day, with a slightly weaker short-term bias. If price holds above P (110,603.3), a test of R1 (110,956.7) and the 20-day high of 112,330 is likely; if price breaks below S1 (109,976.7), the next support is the dense zone of MA5 (109,990) and MA20 (109,280.5).
On the international market, HG=F closed at 6.678 USD/lb on September 23, down 1.21%, with a 5-day gain of 5.17% and a 20-day gain of 0.81%; ATR was 0.1315, pivot P was 6.807, R1 was 6.869, and S1 was 6.702, with the close below S1, weaker short-term than China. The position change chPos was 76.5%, down notably from 93.4% on September 22, indicating long liquidation on the international market.
Risk indicators show DD52w at 13.49%, DD20d at 6.96%, Sharpe30 at 1.009, VaR95 at -2.97%, and Vol20 at 24.97%, with volatility at a moderate level.
II. Fundamental Drivers
On the macro rates side, the US 10-year Treasury yield ^TNX stood at 5.114 on September 23, up 3.04% on the day, at elevated levels, weighing on valuations for non-yielding assets and high-inventory commodities. The US Dollar Index DX-Y.NYB stood at 101.12, up 0.68% on the day; a stronger dollar typically pressures USD-denominated copper prices. If US Treasury yields and the dollar rise in tandem, upside for copper is capped; if the dollar retreats, copper prices are likely to find support.
On the inventory side, SHFE copper warrants stood at 19,088 tonnes on September 23, a weekly change of -1,717 tonnes; on September 22 they were 20,805 tonnes, a weekly change of -1,503 tonnes, marking consecutive destocking. LME warehouse inventory was 254,250 tonnes on September 22 and 255,875 tonnes on September 21, a modest decline. China's absolute inventory level is low; continued destocking would support the front-month contract.
On geopolitical and supply disruptions, international headlines over the past 48h show: a fatal accident at BHP's Escondida mine (Mining_Copper, 2026-09-23 19:33:29), which may trigger short-term supply concerns; Glencore's Cerrejón coal mine railway suspended after an attack (Mining_Copper, 2026-09-23 16:22:42), which, though a coal asset, reflects operational risk in key producing regions; Selkirk Copper's Minto project valued at USD 494 million, nearly three times construction cost (Mining_Copper, 2026-09-23 13:57:33), showing copper mining assets remain highly attractive. On the China headlines side, a Xinhu Nonferrous commentary noted that the unresolved US copper tariff is the main reason for the copper price surge (Sina_Futures, 2026-09-23 09:40:04), and a Morgan Stanley report said the CCL and copper foil赛道 is opening up USD 10 billion in incremental value (SMM_CN, 2026-09-23 15:47:00), with AI-related demand constituting a medium- to long-term bullish factor.
Overall, macro headwinds and supply disruptions coexist, with copper prices in a high-level range-bound pattern amid intertwined bullish and bearish factors.
III. Positioning & Fund Flows
On the international market, 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, and net long net was 65,106 lots, a change Δ of -17,048 lots versus the prior week. Net longs over the prior three weeks 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 long positioning has fallen continuously from the September 8 high of 82,154 lots to 65,106 lots, a decline of about 20.75%, indicating speculative funds are reducing positions.
On crowding, netPct on September 15 was 22.49%, crowd was 63.36, CTA was 98, and hedge was 58.27%. Compared with netPct 27.62% and crowd 69.39 on September 8, netPct 25.79% and crowd 68.96 on September 1, and netPct 26.92% and crowd 69.26 on August 25, both the net long share and crowding have retreated from highs, CTA held steady at 98, and the hedge ratio rose from 53.66% to 58.27%, indicating some funds are shifting toward hedging.
On China positioning, SHFE Copper main contract OI was 171,175 lots on September 23, up 24,381 lots from 146,794 lots on September 22, while price fell 0.8%; an open interest build on a price decline indicates shorts entering. OI was 151,880 lots on September 18 and 159,506 lots on September 17, with sizable positioning swings.
On options and volatility, ^VIX stood at 15.18 on September 23, up 2.08%, at a low level, with limited market panic. HG=F's ATR was 0.1315 and Vol20 was 24.97%, with volatility moderate. If net long positioning continues to decline and crowd breaks below 60, short-term pullback pressure intensifies; if net longs stabilize and rebound, prices are likely to resume their uptrend.
IV. Cross-Asset Relative Value
On the copper-gold ratio, HG_GC_RATIO stood at 0.0016 on September 23, with the 1-year percentile P1Y at 91.67% and the 3-year percentile P3Y at 47.62%. The copper-gold ratio is at a high 1-year percentile, meaning copper is outperforming gold, but the 3-year percentile is neutral, indicating the medium- to long-term ratio is not extreme. If the copper-gold ratio retreats from highs, it may reflect copper weakening relative to gold, and changes in gold's safe-haven demand warrant attention.
On the term structure, on the international market CONTANGO M1-M2 was -0.0385 (-0.57%), RY was -6.79%, and slope was 0.0353. A negative M1-M2 indicates the front month trades at a discount to the deferred month, a Contango structure, though the magnitude is small. If Contango deepens, it reflects loose near-term supply; if it flips to Backwardation, the near end is tight.
On the dollar-copper linkage, the US Dollar Index at 101.12, up 0.68%, pressures copper prices. The US 10Y Treasury yield at 5.114, up 3.04%, with rising real rates unfavorable for copper. If the dollar and US Treasury yields retreat in tandem, copper prices are likely to find relative-value support.
V. Sentiment
Over the past 48h there were 6 China-related headlines, among which base metals fell broadly, with LME zinc, alumina, polysilicon, and coking coal down more than 1%, and lithium carbonate down more than 3% (SMM Daily Review, 2026-09-23 17:43:00), an overall bearish tone. The Xinhu Nonferrous commentary focused on the unresolved US copper tariff (Sina_Futures, 2026-09-23 09:40:04), showing the market is highly focused on policy uncertainty. Morgan Stanley's report on USD 10 billion in incremental value for CCL and copper foil (SMM_CN, 2026-09-23 15:47:00) constitutes a structural bullish factor.
On international headlines, the Escondida accident (Mining_Copper, 2026-09-23 19:33:29) may trigger supply concerns, a bullish sentiment; Glencore's Cerrejón railway attack (Mining_Copper, 2026-09-23 16:22:42) is bullish; Ivanhoe Electric's rising costs (Mining_Copper, 2026-09-23 16:04:29) is bearish. Overall, sentiment is neutral-to-bearish, with headlines over the past 48h skewing bearish over bullish.
VI. Historical Statistical Patterns
Seasonally, late September to early October is typically a transition period into China's copper consumption peak season, with downstream demand from cables, air conditioners and other sectors rebounding month-on-month.
Based on currently available data, SHFE Copper has risen a cumulative ~1.69% over the past 5 days, while the international market HG=F has gained 5.17% over the same period, a marked divergence in gains between the international and Chinese markets, with China's upside participation weaker than the international market. Historical patterns show that if the international market continues to outperform China, the import window may close, raising the probability of a subsequent catch-up rally in China; if the international market pulls back, China will follow lower.
On inventory seasonality, SHFE warrants changed -1717 t week-on-week, extending the destocking trend and consistent with typical September peak-season characteristics. LME inventory stands at 254250 t, a neutral absolute level. If destocking continues after October, seasonal support remains intact.
VII. Long-Short Game Simulation
Bullish factors: 1) SHFE inventory of 19088 t, down 1717 t week-on-week, with consecutive destocking and near-term supply tightness; 2) SHFE Copper closed at 110330 CNY/t, holding above MA5 (109990) and MA20 (109280.5), with bullish moving-average alignment; 3) the fatal accident at the Escondida mine (Mining_Copper, 2026-09-23) may trigger short-term supply disruption; 4) a Morgan Stanley report citing a USD 10 billion incremental opportunity in the CCL and copper foil segments (SMM_CN, 2026-09-23), medium- to long-term bullish for AI demand; 5) the copper/gold ratio at the 91.67% 1-year percentile, with copper relatively strong.
Bearish factors: 1) COT net long of 65106 lots, down 17048 lots from the prior week, as speculative funds cut positions; 2) the US dollar index at 101.12, up 0.68%, and the 10Y US Treasury yield at 5.114, up 3.04%, a macro headwind; 3) HG=F closed at 6.678, below S1 (6.702), with the international market soft in the short term; 4) Chinese base metals broadly fell, with lithium carbonate down more than 3% (SMM daily commentary, 2026-09-23), a bearish sentiment backdrop; 5) SHFE Copper fell on September 23 with open interest building 24381 lots, as shorts entered; 6) the term structure is in Contango, with the front month at a discount.
Short- versus medium-term balance of forces: in the short term (1-5 days), bears hold a slight edge, given the international market breaking below S1, a stronger dollar and COT position cuts; in the medium term (1-3 months), bullish factors persist, with destocking and supply disruption providing support. If the price holds MA20 (109280.5), the medium-term bullish setup remains intact; if it breaks below, the price may test L20 (106650).
VIII. Trading Strategies & Risk Management
Strategy One (buy the range low): if SHFE Copper pulls back and stabilizes near MA20 (109280.5), a light long can be trialed, with an entry reference of 109300 CNY/t, a stop-loss reference of 108500 CNY/t (below the September 17 close), and a target reference of 110950 CNY/t (near R1), a 1-5 day horizon, and position size no more than 20%. Exit if the stop-loss is breached.
Strategy Two (breakout follow): if SHFE Copper holds above the pivot P (110603.3) and breaks above R1 (110956.7), a momentum long can be initiated, with an entry reference of 111000 CNY/t, a stop-loss reference of 110300 CNY/t, and a target reference of 112330 CNY/t (the 20-day high), a 1-5 day horizon, and position size no more than 15%. If the breakout fails, stay on the sidelines.
Risk management: cap single-trade risk within 2% of total capital; VaR95 is -2.97% and Vol20 is 24.97%, indicating moderate volatility, so position management is required. If the US dollar index breaks above 102 or the 10Y US Treasury yield breaks above 5.2%, long strategies should be approached with caution.
IX. This Week's Data Calendar
China economic calendar for the next 7 days: 2026-09-29 21:30 [CNY/HIGH] Manufacturing PMI. Focus on the Manufacturing PMI's guidance for copper demand expectations; a beat would be bullish for copper prices, while a miss would weigh on them.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.