Price trend

As shown in the above figure, copper prices have slightly decreased this week. As of this weekend, the spot copper price is 78,733.33 RMB/ton, a decrease of 1.49% from 79,921.67 RMB/ton at the beginning of the week, an increase of 6.64% from the beginning of the year, and a year-on-year decrease of 1.2%.

According to the weekly chart of SunSirs, copper prices have fallen for 3 weeks and risen for 8 weeks in the past three months, with a slight decline this week.

Analysis review

LME copper inventory

According to data released by the London Metal Exchange (LME). LME copper inventory has slightly increased, with 108,100 tons of LME copper inventory as of the weekend, up 18.5% from the beginning of the week.

Macroscopically, the Trump administration's decision to impose a 50% tariff on imported copper starting from August 1st has directly ignited speculative sentiment in the global copper market. The US non farm payroll data for June exceeded expectations (with 272,000 new jobs added and the unemployment rate dropping to 4.1%), coupled with initial jobless claims falling to a seven week low (227,000), indicating that the labor market resilience still exists, supporting the US dollar index to rebound to 97.92 (a two-week high) on Thursday, suppressing copper prices.

Supply side: According to Cochilco data from Chile, Codelco's copper production increased by 16.5% year-on-year to 130,100 tons in May, while BHP's Escondida mine production surged by 24.4% to 132,000 tons, and the world's largest copper mine supply capacity rebounded. The Mantoverde project of Capstone Copper has obtained environmental permits and is expected to be put into operation in 2026, with an annual production capacity of 125,000-135,000 tons. The medium - to long-term supply increment is expected.

On the demand side: Currently, it is the traditional off-season for copper consumption, with a significant decrease in terminal orders. Coupled with high copper prices suppressing downstream buying enthusiasm, new orders from refined copper rod enterprises have only slightly rebounded. At the same time, the National Development and Reform Commission is promoting the construction of high-power charging facilities (with over 100,000 units nationwide by the end of 2027) and supporting policies such as power grid upgrades and photovoltaic energy storage, which may boost copper demand in the long run, but the short-term effect is limited.

The impact of the United States imposing a 50% tariff on imported copper:

Pre hype tariff expectations:

Before the implementation of tariff policies (especially in March April 2025), the market had already traded the logic of "shortage of US copper supply" in advance. Due to the 50% dependence on copper imports in the United States, the expectation of tax increases has driven COMEX copper prices to skyrocket. After the initial implementation of the tariff policy in April, the market found that copper was not directly included in the "equivalent tariff" list (such as Article 232), and the logic of hoarding in the early stage collapsed. The large-scale withdrawal of speculative funds led to a 14% drop in COMEX copper prices in a single week, and Shanghai copper followed suit and even hit the limit down (down 7.01% on April 7th)

Inventory returning to the Asian market:

After the implementation of tariffs, the copper trade flow to the United States has reversed, and LME Asian warehouses (especially in China) have passively accumulated inventory. The copper inventory of the Shanghai Futures Exchange increased to 84,600 tons in early July (the first increase in three weeks), exacerbating expectations of loose supply in the spot market.

Global inventory migration exacerbates regional imbalances

The "suction effect" of the United States: Under the expectation of tariffs, COMEX inventory surged by 120% compared to the beginning of the year to 176,000 tons, while LME inventory fell to 114,000 tons (with an increase in the proportion of Asian warehouses), and China's previous futures inventory also increased to 84,600 tons (data from early July).

China's passive accumulation risk: The decrease in copper trade flows to the United States (such as Chile's 44% year-on-year decrease in exports to China), coupled with high domestic smelting production, may lead to unexpected accumulation of social inventory, suppressing mid-term prices.

Future outlook:

In summary, after the implementation of tariff policies, the market focus shifted to fundamentals, while the accumulation of inventory during the off-season and the strong US dollar formed a double pressure. Copper prices may be under slight pressure in the short term.

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