Deep Dive Review Notes for October 18, 2026 [Weekend Special Edition]

As oceans continue to warm, risks to marine ecosystems and coastal communities are increasing. This El Niño event is highly likely to affect the growth of vegetables, rice, soybeans, aquaculture, feed, palm oil, rubber, sugar, and cotton globally. Heavy rainfall disrupts production of vegetables, fruits, and staple crops—directly pushing up CPI. Related sectors—including agriculture, forestry, animal husbandry, and fisheries—are all affected; in fact, speculative trading in these sectors has already been underway for some time. The transmission chain through which El Niño impacts stock market performance includes: (1) a supply-constriction channel centered on agriculture—covering rubber, feed, aquaculture, and agricultural product processing; (2) an energy channel—including hydropower generation, coal mining, and electricity; and (3) fisheries. As the El Niño phenomenon intensifies, sea temperatures off Peru’s coast have risen abnormally, causing anchovy stocks to disperse and raising the proportion of juvenile fish—severely compressing the fishing window. Peru’s Ministry of Production has confirmed the cancellation of the second anchovy fishing season in 2026 for the central-northern region; annual fishing quotas have been cut by approximately 36% year-on-year—the lowest in a decade. Global fishmeal prices have surged over 75% year-on-year; Peruvian premium fishmeal quotations briefly exceeded USD 2,800 per ton, while domestic port spot prices approached RMB 20,000 per ton—hitting a new historical high. As the core protein ingredient in aquatic feed, fishmeal accounts for 30–50% of the cost of specialty aquatic feeds; its sharp price rise is reshaping cost structures and pricing expectations across the entire aquaculture industry chain. Stocks related to these themes—including corn and other agriculture, forestry, animal husbandry, and fisheries sectors—are also being actively traded. Nonferrous metals markets have performed poorly overall; among them, copper has drawn particularly frequent inquiries—so today we’ll focus specifically on copper. Copper price levels are determined by the supply cycle. Globally, copper mines have now entered a low-elasticity supply phase, compounded by high extraction costs and low inventories. Meanwhile, new demand from sectors insensitive to high prices—such as power grids—is strongly stepping in to replace traditional demand. Overall, copper prices have already completed an upward shift in their structural baseline: even if significant corrections occur going forward, it will be difficult for prices to fall below the lows of the previous cycle—the floor continues rising. Weak traditional demand was once mistakenly perceived as a potential risk for copper price declines. In reality, however, subdued traditional demand combined with insufficient replacement from new demand—and the difficulty of significantly expanding new copper mine supply—has resulted in the current low-elasticity copper mine supply phase. This is precisely the fundamental reason behind this round of copper price decoupling from historical patterns. Examining global copper mine output growth since 1900 reveals that growth rates between 1900 and 1950 were far more volatile than those after 1950. Using the compound annual growth rate (CAGR) of global mined copper output as a proxy for supply-release intensity, four major global copper supply-release cycles can be identified since the 1950s: First supply cycle: 1955–1968 (14 years) Second supply cycle: 1969–1994 (25 years) Third supply cycle: 1995–2011 (17 years) Fourth supply cycle: 2012–present (15+ years) Corresponding price behavior shows that long-term copper prices do not oscillate repeatedly around a fixed mean; rather, they exhibit a pattern of progressively breaking away from prior platforms and establishing new price ranges as supply cycles shift. In the latter half of the 1960s, sustained demand from power grids, automobiles, construction, home appliances, and industrial equipment rapidly absorbed earlier oversupply. From 1969 to 1974, newly added supply increasingly came from greenfield projects worldwide, low-grade deposits, and large-tonnage resources. In the 1990s, electronics, power, construction, and manufacturing supply chains shifted eastward toward East Asia, gradually making Asia a key consumption hub for refined copper globally.

Copper Prices Hit Record High, Then Cool Down: The Logic Behind the Global Copper Rush

Copper prices, having just hit a record high, swiftly corrected. As of the overnight session closing on September 12, the main SHFE copper futures contract settled at RMB 108,440 per ton—down 0.20%; overnight trading ranged between RMB 108,350 and RMB 108,830 per ton. International copper futures also fell 0.39% overnight. SHFE copper breached the RMB 110,000 per ton threshold in early September: on September 8, the main contract closed at RMB 110,620 per ton—reclaiming the RMB 110,000 level for the first time in seven months. However, it subsequently declined for several consecutive trading days, falling roughly 2% from its recent peak. This rapid correction stemmed primarily from three factors. First, after a sustained rally and record highs, some investors locked in profits, triggering concentrated short-term selling pressure. Second, escalating geopolitical tensions pushed up energy prices, shifting market expectations regarding inflation and the Federal Reserve’s policy path—leading to stronger U.S. dollar and Treasury yield dynamics, which weighed on risk assets including nonferrous metals. Third, markets began reassessing inventory relocation logic driven by anticipated U.S. copper tariffs: if such policies fall short of expectations, copper previously shipped into the U.S. could flow back, potentially easing supply tightness. Entering 2026, copper prices—after consolidating—broke above prior highs again, forming a ‘surge–consolidation–surge-again’ stair-step pattern. Unlike the last cycle, which was mainly supply-driven, this round features more complex pricing drivers: markets are pricing not only copper itself but also mine supply expectations, cross-regional inventory shifts, anticipated U.S. copper tariff policies, and shifts in investor sentiment. Consequently, copper prices have become markedly more sensitive to individual policy signals and inventory data. Three Forces Converging to Lift Copper Prices The recent copper price rally was propelled by three interlocking forces: (1) slow recovery in mine supply; (2) inventory redistribution driven by tariff expectations; and (3) continuously expanding demand linked to new energy and AI applications. These forces temporarily converged—but each carries substantial uncertainty. Global copper mine output remains stubbornly stagnant. In August, Codelco’s copper export revenue dropped to USD 4.62 billion—a 14% month-on-month decline—mainly due to severe winter storms and disrupted mine operations. Its self-produced copper totaled 564,000 tons in H1 2026, down 11% year-on-year. Glencore’s self-produced copper stood at 851,600 tons in 2025—down ~41% from 1,453,700 tons in 2018, largely due to declining ore grades, lower recovery rates, and mine closures. Major miners like Freeport-McMoRan face similar challenges: falling grades and rising costs. A more direct signal comes from copper concentrate treatment charges (TCs). TCs represent processing fees paid by smelters to miners; tighter ore supply weakens smelters’ bargaining power and pushes TCs lower. The benchmark long-term TC for copper concentrate in 2026 has fallen to USD 0 per ton, while spot TCs plunged to a historic low of USD −200.31 per ton. Excess smelting capacity further exacerbates this imbalance, fueling expectations of smelter cuts—and tightening refined copper supply. Zijin Mining previously assessed that scarcity of high-quality copper resources, coupled with constraints at the mine supply end, has cemented a long-term structural shortage in the copper market. Imbalanced inventory distribution constitutes another key upward force.

Copper Climbs From Record-High Close With Supply Still Tight

Aug 25, 2026

Copper prices surged 16% year-to-date on the London Metal Exchange, hitting record highs amid tight global supplies and draining stockpiles. Spot premiums remain significantly elevated above futures despite easing market squeezes.

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Copper Climbs From Record-High Close With Supply Still Tight

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