一、Price Action & Technicals
As of the close on September 24, 2026, the main continuous contract of SHFE Copper closed at 110,130 CNY/t, down 0.59% on the day, with a trading volume of 73,438 lots and open interest of 178,590 lots. Over the past five trading days, the price trended higher then lower: it closed at 109,620 CNY/t on September 18, up 1.4%; at 110,180 CNY/t on September 21, up 0.59%; at 111,320 CNY/t on September 22, up 1.24% to hit a phase high; then at 110,330 CNY/t on September 23, down 0.8%, and at 110,130 CNY/t on September 24, down 0.59%, giving back approximately 1.07% over two days.
In terms of range position, the 20-day high is 112,330 CNY/t, the 20-day low is 106,650 CNY/t, and the latest close of 110,130 CNY/t is at the ~66.6th percentile of this range, about 2.0% below the 20-day high and about 3.3% above the 20-day low. The MA5 is 110,316 CNY/t, the MA20 is 109,372 CNY/t; the closing price is ~186 CNY/t below the MA5 and ~758 CNY/t above the MA20. The short-term moving average is flat while the medium-term moving average remains upward sloping, forming a high-range consolidation pattern with shrinking volume. The ATR14 is 1,353.6 CNY/t; based on the latest close, the intraday fluctuation is ~1.23%, converging from previous levels.
For the pivot system, the pivot P on September 24 is 110,210 CNY/t, R1 is 110,490 CNY/t, S1 is 109,850 CNY/t. The current price is below the pivot, showing short-term weakness but not breaking S1. Key level layers: the first resistance above is the pivot at 110,210 CNY/t and R1 at 110,490 CNY/t; a breakout would target the September 22 high of 111,320 CNY/t and the 20-day high of 112,330 CNY/t. The first support below is S1 at 109,850 CNY/t, followed by MA20 at 109,372 CNY/t, then the 20-day low at 106,650 CNY/t. If the price holds above 109,850 CNY/t and recovers 110,210 CNY/t, the range-bound bullish structure will persist; if it breaks below 109,372 CNY/t effectively, the probability of retesting 106,650 CNY/t rises.
二、Fundamental Drivers
On the macro rate front, the U.S. 10-year Treasury yield stands at 5.18%, up 0.43% on the day, remaining at a high absolute level that pressures the valuation of non-interest-bearing assets, but copper, as an industrial metal, is more driven by growth expectations. The U.S. Dollar Index is at 100.97, down 0.32% on the day; a weaker dollar provides marginal support to copper prices denominated in U.S. dollars. The divergence between rate and dollar trends indicates the market is repricing between growth and inflation, with copper's sensitivity to rate hikes being temporarily lower than its sensitivity to dollar weakness.
Inventories show a divergence between onshore and offshore markets. LME warehouse inventories stood at 251,500 tonnes on September 25 and 251,175 tonnes on September 24, remaining at a high absolute level; COMEX registered inventories stood at 432,818 tonnes on September 24; SHFE warehouse warrants stood at 16,620 tonnes on September 24, down 2,468 tonnes week-on-week, with destocking continuing in China. China's low warehouse warrants coexist with high open interest: 178,590 lots of open interest correspond to 16,620 tonnes of warrants, with the physical-to-futures ratio remaining tight, posing potential support for near-month contracts.
On the supply side, Peru's Minister of Mines stated that this year's copper production is expected to reach 2.50-2.70 million tonnes (SMM_CN, 2026-09-26 11:45:00), a neutral supply-side comment. Geopolitically, ArcelorMittal suspended output at its Kryvyi Rih steel mill due to Russian strikes (SMM_EN, 2026-09-26 20:35:00), with limited direct impact on copper demand, but it reflects ongoing supply chain disruption risks.
In terms of term structure, the international market is in CONTANGO: M1-M2 is -0.034 (-0.5%), the annualized forward RY is -6.06%, and the slope is 0.0339. The near-month discount structure indicates that the spot market is not tight, contrasting with China's low warehouse warrants, making the onshore-offshore arbitrage window worth tracking.
三、Positioning & Fund Flows
COT positioning shows that as of September 22, 2026, total open interest in the international market was 301,657 lots, with long positions at 96,421 lots, short positions at 13,899 lots, net long positions at 82,522 lots, an increase of 17,416 lots week-on-week. The net long position was 65,106 lots on September 15, down 17,048 lots week-on-week; it was 82,154 lots on September 8 and 72,882 lots on September 1. After two weeks of range-bound trading, net long positions have expanded again, with significant long position building.
In terms of crowding metrics, the net long ratio on September 22 was 27.36%, crowding was 69.05, CTA percentile was 98, and hedge ratio was 56.61%. Compared with the net long ratio of 22.49% and crowding of 63.36% on September 15, and net long ratio of 27.62% and crowding of 69.39% on September 8, the current net long ratio has rebounded to near previous highs, and the CTA percentile remains at the extreme level of 98. This means trend-following funds have been highly involved in long positions, with limited marginal incremental buying space; once the price breaks below key moving averages, CTA position cuts may amplify the downward slope.
In terms of China's positioning, open interest in the main continuous SHFE Copper contract rose from 146,794 lots on September 22 to 178,590 lots on September 24, an increase of ~31,796 lots over two days, with prices falling in the same period, indicating growing long-short divergence rather than unilateral exit. The HG=F open interest percentile in the international market is 89.3%, remaining in the high range.
四、Cross-Asset Relative Value
The copper-gold ratio (HG_GC_RATIO) is at 0.0016, with a 1-year percentile of 90.87% and a 3-year percentile of 47.49%. The 1-year percentile is at a high level, indicating copper has significantly outperformed gold over the past year; the 3-year percentile is only 47.49%, near the median, meaning the copper-gold ratio is not extreme over a longer time horizon. Based on mean reversion logic, the 1-year high percentile implies downward pressure on copper's relative valuation against gold, i.e., gold has room to catch up relative to copper; but based on momentum logic, the current ratio remains in an uptrend, and copper's relative strength has not yet shown a turning signal. When these two signals conflict, the 3-year median percentile should be used as an anchor to judge that the current ratio is not systematically overvalued, with short-term momentum still dominant.
The U.S. Dollar Index at 100.97 is down 0.32%, providing negative correlation support to copper prices. The U.S. 10-year Treasury yield at 5.18% is up 0.43%, weighing on the copper-gold ratio, as gold is more sensitive to real rates. The VIX is at 14.87, down 5.11%, with risk sentiment in a low-fluctuation range, remaining neutral for industrial metals.
In terms of risk metrics, the 52-week maximum drawdown is 13.49%, the 20-day maximum drawdown is 7.03%, the Sharpe30 is 1.053, the VaR95 is -2.97%, and the 20-day volatility is 24.89%. Volatility is at a moderate level, consistent with the convergence of ATR14, indicating the market is choosing to reduce exposure ahead of PMI data.
五、Sentiment & Public Opinion Monitoring
There are two China-related headlines in the past 48 hours: one is “Gold, Silver, Oil Weekly Charts Down, International Metals Broadly Lower, LME Tin Up Over 1%, LME Zinc Down Nearly 2%, U.S. Stocks Up [Holiday Session Review]” (SMM_CN, 2026-09-26 17:50:00), with broad declines in international metals exerting a bearish bias on China's opening sentiment; the other is “Peru Minister of Mines: Peru's Copper Production Expected to Reach 2.50-2.70 Million Tonnes This Year” (SMM_CN, 2026-09-26 11:45:00), a neutral supply-side comment.
There are two international-related headlines: “[SMM Analysis] A New Variable in Zimbabwe's Lithium Mining” (SMM_EN, 2026-09-27 21:02:09) and “[ArcelorMittal Halts Kryvyi Rih Steel Mill Output After Deadly Russian Strikes]” (SMM_EN, 2026-09-26 20:35:00). The former has low correlation with copper, while the latter reflects geopolitical disruption. Overall, public opinion leans neutral to bearish, with no unilateral driver, and the market awaits direction from the September 30 PMI data.
六、Historical Statistical Patterns
Positioning the current price via historical percentiles: the copper-gold ratio's 1-year percentile is 90.87%, at a high level over the past year, while its 3-year percentile is 47.49%, near the median, indicating copper's current relative strength against gold is a near-year phenomenon rather than a 3-year extreme. The HG=F open interest percentile in the international market is 89.3%, at a high level, consistent with COT crowding of 69.05 and CTA percentile of 98, confirming crowded fund positioning.
In terms of price range, the 20-day high of SHFE Copper is 112,330 CNY/t, the low is 106,650 CNY/t, and the current price of 110,130 CNY/t is at the 66.6th percentile of the range, belonging to the upper-middle position. The 52-week maximum drawdown of 13.49% indicates a deep correction occurred over the past year, with the current price still far from the 52-week high. The 20-day maximum drawdown of 7.03% shows recent correction magnitude is controllable.
In terms of spread Z-score, the CONTANGO M1-M2 term structure is -0.034 (-0.5%), with an annualized forward rate of -6.06%, and the near-month discount is mild, with no extreme distortion. SHFE warehouse warrants fell 2,468 tonnes week-on-week to 16,620 tonnes, with the destocking slope providing positive support for near-month contracts. Overall, the current price is in a combination of upper-middle range, crowded fund positioning, and tight onshore inventories vs loose offshore inventories; historically, similar combinations often require macro data to break the balance.
VII. Long vs Short Gameplay Deduction
Bullish Arguments: 1. SHFE warrants stood at 16,620 tons, down 2,468 tons week-on-week, with destocking continuing in China; low warrant levels support near-month contracts. 2. Closing price of 110,130 yuan firmly above MA20 of 109,372 yuan by ~758 yuan, with medium-term moving averages still upward sloping. 3. COT net long positions totaled 82,522 lots, up 17,416 lots week-on-week, with long capital re-entering the market. 4. U.S. Dollar Index retreated 0.32% to 100.97, bringing marginal positive impact on the pricing side. 5. VIX declined 5.11% to 14.87, with risk sentiment not deteriorating.
Bearish Arguments: 1. Two consecutive down days on September 23 and 24, with cumulative pullback of ~1.07%, weakening short-term momentum. 2. CTA percentile at 98, crowding degree at 69.05, with long positions highly crowded and limited marginal buying. 3. LME inventories at 251,500 tons, at an absolute high level, with tight physical supply in the international market. 4. Term structure in contango, near-month discount at -0.5%, with no squeeze pressure on the physical side. 5. 10-year U.S. Treasury yield rose 0.43% to 5.18%, exerting pressure on valuation.
Short- to Medium-Term Power Balance: Short-term (1-5 days): long and short forces are nearly balanced, with price below pivot of 110,210 yuan and above S1 of 109,850 yuan, direction undecided. Medium-term (1-4 weeks): destocking and low warrant levels in China provide bullish support, but high international inventories and high crowding limit upside. The release of China-U.S. PMI data on September 30 is the key variable breaking the balance: if China's Manufacturing PMI meets the 50.1 expectation, the bullish structure will strengthen; if it falls short of expectations, the probability of retesting MA20 or even the 20-day low will rise.
VIII. Trading Strategies & Risk Management
Core strategy: Buy on retracement. Entry at 109,850 yuan (S1 level on September 24), stop-loss at 108,400 yuan, target at 112,300 yuan, time horizon: 1-5 trading days, position size recommendation: no more than 15% of total capital. Entry logic: 109,850 yuan is the confluence of pivot system S1 and short-term support, with MA20 at 109,372 yuan below forming the second line of defense. If price stabilizes in this area after retracement and reclaims the pivot of 110,210 yuan, the range-bound bullish structure will continue, with target at the 20-day high of 112,300 yuan.
Failure condition: If price breaks below the stop-loss of 108,400 yuan with conviction, it indicates that MA20 support has been lost, the long structure is broken, and one should exit to wait for price to rebuild support near 106,650 yuan. The reverse scenario is only a failure condition, with no separate reverse strategy. If price breaks through 112,300 yuan directly without retracing to 109,850 yuan, this strategy will not be triggered, and no chasing of highs is allowed.
IX. This Week's Data Calendar
Beijing 2026-09-28 Mon 09:30 / New York 2026-09-27 Sun 21:30 [CNY/MEDIUM] Industrial Profits ytd/y.
Beijing 2026-09-30 Wed 09:30 / New York 2026-09-29 Tue 21:30 [CNY/HIGH] Manufacturing PMI, expected 50.1, prior 49.8.
Beijing 2026-09-30 Wed 09:30 / New York 2026-09-29 Tue 21:30 [CNY/HIGH] Non-Manufacturing PMI, expected 49.3, prior 49.0.
Beijing 2026-09-30 Wed 09:45 / New York 2026-09-29 Tue 21:45 [CNY/HIGH] RatingDog Manufacturing PMI, expected 51.7, prior 51.5.
Beijing 2026-09-30 Wed 09:45 / New York 2026-09-29 Tue 21:45 [CNY/HIGH] RatingDog Services PMI, expected 51.2, prior 51.4.
Beijing 2026-09-30 Wed 21:45 / New York 2026-09-30 Wed 09:45 [USD/MEDIUM] Chicago PMI SEP, expected 51.3, prior 47.1.
Beijing 2026-10-01 Thu 07:01 / New York 2026-09-30 Wed 19:01 [CNY/LOW] Bank Holiday.
Beijing 2026-10-01 Thu 22:00 / New York 2026-10-01 Thu 10:00 [USD/MEDIUM] ISM Manufacturing PMI, expected 55.0, prior 54.6.
Beijing 2026-10-02 Fri 07:01 / New York 2026-10-01 Thu 19:01 [CNY/LOW] Bank Holiday.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.