Price trend

According to monitoring data from SunSirs, copper prices rose initially before falling last week; as of the 17th, the price of copper stood at 102,035 RMB/ton—up 3.2% from the beginning of the week and 34.05% year-on-year.

According to the weekly price fluctuation chart from SunSirs, over the past three months, copper prices declined for seven weeks and rose for six weeks; last week, copper prices saw a slight increase.

LME Copper Inventories

LME Copper Inventories: According to data released by the London Metal Exchange (LME), LME copper inventories rose slightly. As of the end of last week, LME copper stocks stood at 400,225 tonnes, an increase of 0.27% compared to the beginning of the week.

On the macro front: The conclusion of a ceasefire agreement has undoubtedly served as a powerful shot in the arm for market sentiment. It directly alleviated extreme market concerns regarding potential disruptions to shipping through the Strait of Hormuz, leading to a pullback in crude oil prices and, consequently, easing cost-side pressures on industrial metals. Meanwhile, the U.S. Dollar Index extended its losing streak to nine consecutive sessions, providing further upward momentum for dollar-denominated metals.

Supply Side: The decline in global copper ore grades constitutes a long-term structural issue, and a downturn in production in major mining regions—such as Chile—has become a reality. More critically, copper concentrate treatment charges (TCs) have plummeted into negative territory (reaching -$78 per dry metric ton); this implies that smelters are incurring losses on every ton of electrolytic copper produced, inevitably compelling them to reduce operating rates and, consequently, tightening refined copper supply at the source. Furthermore, concerns regarding sulfur shortages—triggered by geopolitical tensions in the Middle East—are emerging as a new variable impacting supply. Major producers of hydrometallurgical copper, such as the Democratic Republic of the Congo (DRC), rely heavily on imported sulfuric acid; should these supply channels be disrupted, it would directly constrain global electrolytic copper output.

On the demand side: Although China's GDP grew by 5.0% year-on-year in the first quarter—with domestic demand contributing a larger share—copper consumption specifically appears to be losing momentum. The real estate market remains sluggish, failing to provide any effective stimulus; moreover, the photovoltaic sector has faced bearish news, with solar cell production plummeting by 20.60% year-on-year in March. The weakness of these traditional pillar industries means that high copper prices currently lack solid buying support.

New energy vehicles and high-end manufacturing sectors—such as AI computing power and robotics—have maintained a high level of economic vitality. China Minmetals Corporation forecasts that China's consumption of refined copper will continue to grow at an average annual rate of 3.7% over the next decade, with this incremental demand stemming primarily from these "new quality productive forces." However, the growth generated by these emerging sectors is not yet sufficient to fully offset the decline in traditional real estate and infrastructure sectors, and remains extremely sensitive to price fluctuations.

Market outlook

In summary: disruptions at the mining end and a potential shortage of sulfur have established a solid floor for production costs. Citibank’s upward revision of its price target to $13,000 also reflects the institutional consensus regarding a long-term supply deficit, thereby limiting the potential for any significant downside in prices. However, given the weakening premiums in the spot market and a slower-than-expected pace of inventory drawdown, the upside potential for copper prices remains limited. Copper prices are currently situated within a delicate phase of "high-level consolidation." Consequently, prices are expected to continue trading primarily within a high-range, volatile pattern.

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