Price trend

As shown in the chart above, copper prices rose before falling last week. By the end of the week, spot copper was quoted at 79,285 RMB/ton, up 0.16% from 79,156.67 RMB/ton at the start of the week, up 7.39% from the beginning of the year, and up 9.58% year-on-year.

According to the weekly rise and fall chart of SunSirs, in the past three months, copper prices fell for 5 weeks and rose for 7 weeks. Last week, copper prices rose slightly.

LME copper Stocks

According to data released by the London Metal Exchange (LME), LME copper stocks fluctuated narrowly. As of the weekend, LME copper stocks were 155,800 tons, up 9.91% from the beginning of the month.

On the macroeconomic front, US PPI data for July unexpectedly surged Thursday evening, rising 0.9% month-over-month, far exceeding market expectations of 0.2% and marking the largest monthly increase since June 2022. The year-over-year growth rate rose to 3.3%, a five-month high, with core PPI climbing to 3.7% year-over-year. While the stickiness of US inflation had weakened expectations of a September rate cut, weak Chinese economic data for July had fueled expectations of tighter policy measures.

On the supply side, Chile's Codelco's El Teniente smelter had restarted operations, easing market concerns about supply disruptions. The recent rebound in the spot copper concentrate TC index from a low level suggested a slight easing of tight supply, though overall supply remains tight, maintaining support for copper prices. Domestic refined copper production remained stable at over one million tons per month. Despite two consecutive weeks of accumulation in Shanghai copper inventories, the absolute level of 76,800 tons remained at a five-year low.

Demand side: The consumption side has obvious off-season characteristics, the terminal's new orders were mediocre, processing companies maintained on-demand procurement, consignees were in a wait-and-see mood, and transactions continued to be weak.

Future outlook:

To sum up: the expectation of interest rate cuts and tensions on the mining end had a relatively positive impact on copper prices, but the increase in production and weak demand have led to a rebound in inventories, which was bearish. In the short term, copper prices will mainly adjust at a high level.

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