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| China Copper Price |
Chinese Copper Market Faces Inventory Pressure
China copper prices declined in March due to rising inventories and a firmer US dollar. SHFE April contracts dropped from 103,920 yuan/t to 95,400 yuan/t within three weeks. Meanwhile, LME three-month copper fell from $13,296/t to $12,340.50/t, signaling global market weakness. Inventory increases, now totaling 745,283t, intensified price pressure.
Rising refined output in China contrasts with slower demand recovery after the Lunar New Year. Refined copper output grew 8–13% year-on-year in January–February. Smelters maintained production despite tighter concentrate availability by accepting lower TC/RCs. Consequently, domestic supply exceeded downstream restocking needs.
Demand Moderation in New Energy Vehicle Sector
China’s NEV demand softened after government purchase incentive cuts. NEV output and sales fell 8.8% and 6.9% respectively, dampening copper consumption. Meanwhile, copper imports of unwrought and semi-finished products dropped 16%, reflecting weak arbitrage opportunities. Despite short-term pressure, international supply risks may support medium-term bullish trends.
Meanwhile, a strengthening US dollar and geopolitical tensions in the Middle East added further pressure. Brent crude surged to $109.65/bl, raising market concerns. The Fed maintained its target rate, citing regional instability. However, supply risks in Africa may tighten copper availability, keeping the market cautious.
ScrapInsight Commentary
China’s copper price decline reflects temporary inventory buildup and NEV demand moderation. Stronger US dollar pressures imports, but African supply risks and Middle East tensions could tighten global markets, supporting medium-term bullish sentiment.
