Amid China’s ongoing weak demand signals, copper fell

As the main metals user, China continues to send out weak demand signals, copper prices ended the day down 0.62% at 869.8. Due to China’s weak demand, deliverable stocks in SHFE warehouses are getting close to reaching a four-year peak that was reached last month. Further evidence of the poor demand was provided by a study that revealed an unexpected drop in the operation rates of copper cable and wire companies last week.

Now, investors are looking to China’s crucial third plenum meeting, which takes place on July 15–18, for more stimulus measures. Globally, low macroeconomic data and physical copper demand that is price-sensitive, particularly around $10,000, have limited future price increases.

The output of the massive Chilean copper mining company Codelco decreased year over year in 2024’s first half but is predicted to rebound in the second half. The International Copper Study Group (ICSG) reports that the excess on the global refined copper market decreased to 13,000 metric tonnes in April from 123,000 tonnes in March.

The market had a surplus of 299,000 metric tonnes in the first four months of this year as opposed to 175,000 tonnes in the same period last year. May saw a 15.8% year-over-year increase in China’s imports of unwrought copper to 514,000 metric tonnes, despite low physical use and high pricing. China imported 2.33 million tonnes of unwrought copper and products in the first five months of 2023, an increase of 8.8% over the same time the previous year.

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