Price trend

Data from SunSirs showed that copper prices exhibited an N-shaped trend in August. Starting at 78,371.67 RMB/ton, the price rose to 79,585 RMB/ton at the end of the month, a 1.55% increase and a 6.23% year-on-year increase.

Analysis review

According to the data of SunSirs, the spot price of copper in August was basically higher than the futures price. The main contract is the expected price two months later, and it is expected that prices in the future may be under pressure.

According to LME inventory data, LME copper stocks rose slightly in September. By the end of the month, LME copper stocks were 155,000 tons, up 9.35% from the beginning of the month.

On the macroeconomic front: Market expectations for a September Fed rate cut were strong, with the probability approaching 90% or even 95%.38 Fed Chairman Jerome Powell's speech at the Jackson Hole symposium was interpreted as dovish, reinforcing this expectation. At the end of July, the US Section 232 investigation concluded, with the results indicating no additional tariffs on refined copper, but a 50% tariff on copper and other products. This policy clarity mitigated any short-term disruption.

On the supply side: Chile's Codelco lowered its 2025 production forecast to 1.34-1.37 million tons (down approximately 30,000 tons from its March forecast). Chile's Escondida copper mine (which accounts for 5% of global production) saw a 15% production reduction due to heavy rain. Land transfers for a large copper mine development project in Arizona, USA, were temporarily halted. Refined copper production in July was 1.27 million tons, down from a record 1.3 million tons in June. Recycled copper imports decreased year-on-year (down 2.36% in July), narrowing the price gap between refined and scrap copper, resulting in import losses.

On the downstream side: Despite the drag from the real estate sector, planned grid investment exceeded 825 billion RMB (year-on-year growth)12%, and the new energy sector (photovoltaic, wind power, and new energy vehicles) maintained a high growth rate128%, all of which provided a solid foundation for copper demand. Residential air conditioner production in July was also slightly better than expected.

According to the data of SunSirs, in the past five years, copper prices have risen more than fallen in September, and there is a high probability that copper prices will rise in September this year.

Market outlook

In summary, this month, global copper mine supply disruptions have occurred frequently, Chinese smelters were under pressure due to extremely low processing fees, and domestic inventories remained generally low. This has led to a supply-side situation characterized by "tightening supply at the mine level and regional tightness in refined copper supply." On the demand side, demand from the power grid and new energy sectors remained strong, while traditional real estate was weak. With the "Golden September and Silver October" consumer peak season approaching, concerns remain about the Federal Reserve's failure to cut interest rates or a smaller-than-expected rate cut. Copper prices are expected to fluctuate and strengthen.

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