I. Price Action & Technicals
As of 2026-09-24, the SHFE Copper main continuous contract closed at 110,130 CNY/t, down 0.59% on the day, with volume of 73,438 lots and open interest of 178,590 lots. The past 5 trading sessions showed a pattern of rallying then pulling back: on September 18 it closed at 109,620 CNY/t (+1.4%), on September 21 at 110,180 CNY/t (+0.59%), on September 22 it spiked intraday to 111,320 CNY/t (+1.24%) but failed to hold, on September 23 it fell back to 110,330 CNY/t (-0.8%), and on September 24 it probed further down to 110,130 CNY/t. The weekly high of 111,320 CNY/t and the 20-day high of 112,330 CNY/t form the overhead resistance band, while the 20-day low of 106,650 CNY/t serves as a medium-term support reference.
On the moving average system, as of September 24, MA5 stood at 110,316 CNY/t and MA20 at 109,372 CNY/t; the close of 110,130 CNY/t sits below MA5 and above MA20, with the short-term average turning down while the medium-term average still rises, exhibiting weakening bullish alignment characteristics. The pivot point P is 110,210 CNY/t, first resistance R1 is 110,490 CNY/t, and first support S1 is 109,850 CNY/t; the current price is running just below the pivot, biased weak in the short term.
On the international comparison, HG=F closed at 6.696 USD/lb on 2026-09-25 (-0.34%), with a 5-day gain of 2.37% and a 20-day gain of 2.8%, pivot P 6.765, R1 6.804, S1 6.733, ATR 0.1274, open interest 174,125 lots, and intraday volume of only 38 lots (liquidity is low, so its reference value is limited). ATR has gradually converged from 0.1343 on September 21 to 0.1274, volatility is compressing, and a directional choice is approaching.
However, judging from the relationship between price and moving averages and two consecutive bearish candles, short-term momentum indicators are highly likely retreating from overbought territory. Risk metrics show a 52-week drawdown of 13.49%, a 20-day drawdown of 6.96%, a 30-day Sharpe of 0.9897, VaR95 of -2.97%, and 20-day volatility of 25.45%, overall in a medium-to-high volatility range. Key level assessment: if price holds above 109,850 (S1) and reclaims 110,490 (R1), it could retest 112,330 (20-day high); if it breaks below 109,372 (MA20), the next support is seen at 106,650 (20-day low).
II. Fundamental Drivers
At the macro level, the US Dollar Index DX-Y.NYB stood at 101.04 on 2026-09-25, down 0.25% on the day; a weaker dollar is marginally bullish for dollar-denominated copper prices. But the US 10-year Treasury yield ^TNX at 5.184 rose 0.43% on the day, and elevated real rates weigh on the valuation of non-yielding assets and industrial metals, leaving macro signals mixed.
On inventories, as of 2026-09-24, SHFE copper warrant inventory was 16,620 tonnes, down 2,468 tonnes week-on-week; LME copper inventory was 251,175 tonnes (2026-09-24), versus 252,500 tonnes the prior day (2026-09-23). Chinese warrant inventories continue to destock, and the low-inventory setup supports nearby contracts, but the absolute LME inventory level remains above 250,000 tonnes, so global visible inventory pressure has not fully eased. The divergence between inventories and prices warrants continued tracking; if destocking persists, downside support strengthens.
On the supply side, China headlines over the past 48h show that the world's largest copper mine, Chile's Escondida, is evaluating a phased restart plan (SMM_CN, 2026-09-25 16:03:00); if the restart materializes, mine-side supply expectations improve, a potential bearish factor for copper prices. On international headlines, Zambia's copper growth faces sulfuric acid shortage constraints (SMM_EN, 2026-09-25 16:43:54), Indian copper producers seek a GST cut to ease working capital pressure amid record prices (SMM_EN, 2026-09-25 20:26:57), and the critical minerals boom faces second-round financing gap risk amid shrinking governance support (Mining_Copper, 2026-09-25 20:35:09). Supply-side disruptions and restart expectations coexist, with a directionally neutral-to-bearish impact.
On the demand side, China's September manufacturing PMI will be released at 21:30 on 2026-09-29 (CNY/HIGH), the most critical demand-side validation point next week. Overall, fundamentals present a three-way tug-of-war of “low-inventory support + restart-expectation pressure + elevated macro rates.”
III. Positioning & Fund Flows
On the international COT positioning, 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, net long net was 65,106 lots, and the weekly change Δ was -17,048 lots, the largest single-week decline in four weeks. Looking back over the prior three weeks: September 8 net long 82,154 lots (Δ +9,272), September 1 net long 72,882 lots (Δ -3,389), August 25 net long 76,271 lots (Δ -2,377). Net longs have fallen continuously from the September 8 peak of 82,154 lots to 65,106 lots, a cumulative decline of 17,048 lots, a clear sign of long liquidation.
On crowding metrics, as of 2026-09-15, net long share netPct was 22.49%, crowding crowd was 63.36, CTA positioning was 98, and hedge ratio hedge was 58.27%. Versus September 8's netPct 27.62% and crowd 69.39, net long share and crowding fell in tandem, indicating easing long-trade crowding, but CTA positioning remains at a high of 98, and trend-following funds have not yet turned.
On China positioning, SHFE copper main continuous open interest rose from 146,794 lots on September 22 to 178,590 lots on September 24, a cumulative increase of 31,796 lots over two days; with prices falling over the same period, open interest build on a decline suggests short money entering or increased hedging. On volume, September 22's 91,942 lots was the weekly peak, shrinking to 73,438 lots on September 24, a contraction in turnover.
On options and volatility, ^VIX stood at 14.87 on 2026-09-25, down 5.11% on the day, indicating low market fear. Overall assessment: international long liquidation and China open interest build on a decline leave the fund-flow picture short-term bearish, but the decline in crowding also reduces stampede risk.
IV. Cross-Asset Relative Value
On the copper-gold ratio, HG_GC_RATIO stood at 0.0016, with a 1-year percentile P1Y of 90.87% and a 3-year percentile P3Y of 47.62%. The copper-gold ratio sits at a high percentile on the 1-year horizon (90.87%), meaning copper is relatively expensive versus gold over the past year; if mean reversion occurs, copper faces weakening pressure relative to gold. But the 3-year percentile is only 47.62%, not extreme on a medium-term horizon, so the ratio signal shows a tenor divergence.
On term structure, the international market shows a FLAT structure, with the M1-M2 spread at -0.003 (-0.04%), roll yield RY at -0.54%, and slope at 0.0368. The nearby discount is minimal and the curve is nearly flat, showing neither a deep backwardation signal of spot tightness nor obvious contango pressure of surplus, reflecting that current supply-demand tensions are not pronounced.
On cross-asset linkages, a weaker dollar index at 101.04 is theoretically bullish for copper, but the elevated 10-year US Treasury yield of 5.184 weighs on risk-asset valuations, leaving the copper-dollar-rates triangle in a weak equilibrium. The combination of a high copper-gold ratio percentile and a flat term structure suggests further copper upside requires demand-side data validation rather than being driven purely by financial attributes.
V. Sentiment
Inferring from available information, ^VIX at 14.87 (-5.11%) indicates global risk appetite is warm, but copper itself lacks a strong driver.
Headline bias over the past 48h: on China, Escondida evaluating a phased restart (SMM_CN, 2026-09-25) is bearish on mine supply recovery expectations. Internationally, among 8 headlines, Zambia's sulfuric acid shortage constraining copper growth (bullish), Indian copper producers seeking a GST cut (neutral-to-bearish, reflecting high prices suppressing demand), critical minerals financing gap risk (neutral-to-bearish), and rare earth and lithium-related reports (low direct relevance to copper). Overall headline bias is neutral-to-bearish, with supply-recovery narratives and demand cost-pressure narratives coexisting, and no strong one-sided catalyst in evidence.
VI. Historical Statistics
Limited inference based on available information: the current period is late September, a traditional “Golden September, Silver October” consumption peak window, but in 2026 September prices show high-level oscillation rather than a trend advance, and the strength of the peak season awaits validation from the September 29 manufacturing PMI. From the past 5 days of price behavior, September 18 to September 22 saw three consecutive up closes (cumulative gain of about 3.2%), followed by two days of giveback, a “three up, two down” rhythm within the week, with short-term mean-reversion characteristics. The box formed by the 20-day high of 112,330 and low of 106,650 has a width of about 5,680 CNY/t; based on current volatility, range-bound trading is likely to persist before a box breakout. Cross-validation of seasonal patterns and inventory destocking pace requires more historical data before confirmation.
VII. Long-Short Game Simulation
Bullish logic: (1) SHFE warrant inventory at 16,620 t, down 2,468 t week-on-week, with continued destocking at low levels providing support to the front month; (2) the US dollar index at 101.04, down 0.25% on the day, with a weaker dollar bullish for USD-denominated copper; (3) the closing price of 110,130 CNY/t remains firmly above MA20 (109,372), with the medium-term moving average unbroken; (4) COT crowding fell from 69.39 to 63.36, releasing long-crowding risk and opening room for further upside; (5) supply disruptions such as the sulfuric acid shortage in Zambia provide thematic support.
Bearish logic: (1) COT net longs fell from 82,154 lots to 65,106 lots, a single-week decline of 17,048 lots, with long capital continuing to withdraw; (2) Escondida is gradually resuming production under assessment, with expectations of mine-side supply recovery weighing on prices; (3) the 10-year US Treasury yield at 5.184 remains elevated, with real rates suppressing industrial metal valuations; (4) the copper-gold ratio sits at the 90.87% 1-year percentile, a high percentile, indicating relatively expensive valuation; (5) Chinese main-contract positioning rose 31,796 lots over two days while prices declined, with open interest build on a down move skewing bearish; (6) the term structure is FLAT with a roll yield of -0.54%, lacking signals of spot tightness.
Short- to medium-term balance of forces: in the short term (1-5 days), bears hold a slight edge, with price hugging below the pivot P (110,210), two consecutive bearish candles, and long liquidation on the international market; in the medium term (1-3 months), bulls and bears are balanced, with low inventory and a weak dollar offsetting restart expectations and high rates. The key trigger for directional selection is the September 29 manufacturing PMI; if the data beats expectations, bulls regain momentum, while if it misses, the lower bound of the range at 106,650 faces a test.
VIII. Trading Strategies & Risk Management
Strategy One (buy the dip within the range, LONG): entry reference 109,850 CNY/t (near S1), stop-loss 109,300 CNY/t (below MA20), target 111,300 CNY/t (near the weekly high), horizon 1-5 days, position size recommended no more than 15% of total capital, confidence 6. The logic is that MA20 support holds and inventory is being drawn down, positioning for a rebound off the lower bound of the range.
Strategy Two (sell the bounce, SHORT): entry reference 110,490 CNY/t (near R1), stop-loss 111,000 CNY/t (above R1), target 109,400 CNY/t (near MA20), horizon 1-5 days, position size recommended no more than 15% of total capital, confidence 6. The logic is consecutive bearish candles, long liquidation on the international market, and open interest build on a down move, positioning for a pullback below the pivot.
Risk management: keep single-trade risk exposure within 2% of total capital; if price effectively breaks above 112,330 (20-day high) or below 106,650 (20-day low), the range strategy is invalidated, and positions should be stopped out while awaiting confirmation of a new trend; it is advisable to reduce position size around the September 29 PMI release to avoid event volatility; VaR95 is -2.97%, on which basis the maximum tolerable single-day drawdown is calculated.
IX. Week Ahead Data Calendar
| Date | Time | Event | Importance |
|---|
| 2026-09-29 | 21:30 | China September Manufacturing PMI (CNY/HIGH) | High |
The manufacturing PMI is the core trigger for copper price directional selection next week and warrants close monitoring.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.