Price trend

As shown in the chart above, copper prices fell before rising last week. By the end of the week, spot copper was quoted at 78,855 RMB/ton, down 0.57% from the price of 79,310 RMB/ton at the start of the week, up 6.81% from the beginning of the year, and up 6.65% 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. Copper prices fell slightly last week.

LME copper stocks

According to data released by the London Metal Exchange (LME), LME copper stocks rose slightly. As of the weekend, LME copper stocks were 156,350 tons, up 10.3% from the beginning of the month.

On the macroeconomic front: The CME FedWatch tool shows an 18.1% probability that the Federal Reserve will keep interest rates unchanged in September, an 81.9% probability of a 25 basis point rate cut. The probability of the Fed keeping interest rates unchanged in October is 8%, with a 46.4% probability of a cumulative 25 basis point rate cut and a 45.5% probability of a cumulative 50 basis point rate cut.

On the supply side, Chile's state-owned copper company, Codelco, recently announced a downward revision to its 2025 production guidance (from 1.7 million tons to 1.65 million tons) due to an accident at its flagship El Teniente mine, resulting in a 33,000-ton output loss. Furthermore, capacity constraints in major producing regions like Peru and the Democratic Republic of the Congo (DRC) due to community conflicts and power shortages contributed to the tight balance pattern of global copper supply.

Demand side: August is still in the traditional off-season for consumption, and orders from terminal companies such as cables and home appliances were weak. The downstream sentiment of "buy high and not buy low" was strong, and purchases were only made on demand at low prices.

Market outlook

In summary: as of August 22, the shortage of overseas ore continued. While domestic copper concentrate processing fees had seen a marginal recovery, they remain negative. The narrowing price gap between domestic refined copper and waste copper is beneficial to refined copper consumption. Despite weak off-season demand, inventory accumulation was limited. Continued rigid demand from end users and low inventories provided a floor support, raising market expectations for the "Golden September, Silver October" peak season. In the short term, copper prices are unlikely to break out of their range. In the medium to long term, if the Federal Reserve implements its September rate cut or domestic demand during the "Golden September, Silver October" period exceeds expectations, copper prices will break through their upper limit.

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