Price trend:

Data from SunSirs shows that copper prices saw a volatile rise in October, starting at 83,143.33 RMB/ton and ending the month at 88,095 RMB/ton, a 5.96% increase and a 15.1% year-on-year increase.

According to the SunSirs spot-futures data, copper spot prices initially rose above futures prices in October, then fell below them before rising again at the end of the month. The main contract represents the expected price two months later, suggesting that copper prices are expected to fluctuate significantly in the future.

Analysis review

According to LME inventory data, LME copper stocks fell slightly in October. By the end of the month, LME copper stocks were 135,975 tons, down 4.1% from the beginning of the month.

On the macroeconomic front: September's CPI rose 3% year-on-year, slightly below expectations. The probability of a 25 basis point rate cut by the Federal Reserve standed at 96.7%, with an over 94% probability of another 50 basis point cut in December. Low interest rates were reducing corporate financing costs, stimulating copper demand. The approval of China's 15th Five-Year Plan added further positive momentum. From January to September, profits of industrial enterprises above designated size increased by 3.2% year-on-year, demonstrating market confidence in the growth prospects of the world's largest metals consumer. The US-China trade talks in Kuala Lumpur reached a "preliminary consensus," significantly boosting market risk appetite.

On the supply side, the Grasberg mine in Indonesia (the world's second-largest copper mine) continued to close, and Chile's Antofagasta production may only reach the lower end of the 660,000-700,000-ton range in 2025. The ICSG had lowered its 2025 mine copper supply growth forecast from 2.3% to 1.4%, while Citigroup and UBS predicted minimal supply growth this year. This supply contraction was directly driving up costs.

Downstream: Demand was diverging, with traditional sectors showing weakness and emerging sectors showing strength. Emerging industries such as new energy vehicles and photovoltaics maintained steady growth, while traditional consumer sectors (such as real estate, building materials, and infrastructure) experienced sluggish growth. High copper prices dampened some spot demand, leading to a wait-and-see attitude among downstream companies handling goods.

According to the annual price comparison data of SunSirs, in the past five years, copper prices have fallen more than risen in November, with most of the time it was strong in the first half of the month and fell in the second half.

Market Forecast:

In summary, the dual support of improving macroeconomic conditions and cost-side disruptions suggests copper prices may continue their upward trend in the short term. However, attention should be paid to the month-end and early arrival of the off-season, as well as the potential dampening of downstream demand from high copper prices. Copper prices are expected to fluctuate widely in November.

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