Price trend

As shown in the chart above, copper prices rose slightly this week. By the end of the week, spot copper was quoted at 80,945 RMB/ton, up 1.32% from 79,893.33 RMB/ton at the start of the week, up 9.64% from the beginning of the year, and up 10.09% year-on-year.

Analysis review

Copper weekly change

According to the weekly rise and fall chart of SunSirs, in the past three months, copper prices fell for 4 weeks and rose for 8 weeks. Copper prices rose slightly this week.

LME copper stocks

According to data released by the London Metal Exchange (LME), LME copper stocks fell slightly. As of the weekend, LME copper stocks were 154,175 tons, down 2.95% from the beginning of the month.

Macroeconomic aspects: The mild inflation data of the US CPI in August was 2.9% year-on-year and the core CPI was 3.1%. Coupled with the surge in initial jobless claims to 263,000, a nearly four-year high, it strengthened market expectations of a 25 basis point interest rate cut in September. The continued weakening of the US dollar index pushed up the global purchasing power of dollar-denominated metals.

On the supply side, global mining giant BHP Billiton (BHP) continues to increase its copper resource investment, with production at its Escondida mine in Chile steadily increasing. Market attention is focused on a potential merger between Anglo American and Teck Resources. Furthermore, the suspension of Freeport's Grasberg mine in Indonesia due to a blockage is impacting capacity recovery, exacerbating supply constraints and supporting copper prices. Customs data showed that China's imports of copper ore and concentrate in August reached 2.759 million tons, a year-on-year increase of 7.4%, confirming the resilience of domestic demand.

On the demand side: Domestic new energy vehicle production and sales surged 27.4% and 26.8% year-on-year in August to 1.395 million units, with penetration rates approaching 50%, boosting consumer confidence. Demand in the power sector surged. Downstream bargain hunting, coupled with reduced domestic copper arrivals, drove continued inventory reduction.

Market outlook

In summary, the wet material blockage at Indonesia's Grasberg mine, coupled with the surge in demand from the new energy and power sectors during the "Golden September and Silver October" period, has led to a rebound in copper prices. However, trading remains stagnant amidst high copper prices, highlighting concerns about disruptions at overseas mines and the sluggishness of domestic peak season consumption. Copper prices are expected to remain volatile and stronger in the short term.

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