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| Copper |
Chinese Supply and Inventory Trends
ING strategist Eva Manthey warns that global copper prices face downward pressure due to rising supply. Meanwhile, Chinese smelters increased output in February, reflecting seasonal Lunar New Year effects. Consequently, SHFE inventories hit record highs while LME stocks approach 17-month peaks. As a result, elevated exchange inventories and weaker Chinese import demand may ease the tight market that supported high copper prices.
Market Dynamics and Currency Impact
High January–February copper prices have dampened demand, especially in east and south-central China, where idle capacity dropped below three-year averages. In contrast, a stronger U.S. dollar further pressures global demand, making copper more expensive for overseas buyers. ING emphasizes that macro headwinds, including energy costs and currency fluctuations, are key variables in short-term price movements.
Long-Term Outlook Amid Structural Demand
Despite near-term downward pressure, structural demand from electrification and energy transition underpins copper’s long-term outlook. Therefore, supply improvements may moderate price volatility, but industrial demand for infrastructure, renewable energy, and EV production continues to support global copper consumption. Monitoring inventory trends in China will remain critical for price forecasting.
ScrapInsight Commentary
Short-term copper prices are likely to soften as Chinese production and inventories rise, coupled with weaker import demand. However, long-term fundamentals, driven by electrification and renewable energy growth, maintain structural demand. Analysts expect moderate price correction in Q2–Q3 2026, with LME and SHFE inventories providing key signals.
