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| LME Copper Price |
London Metal Exchange (LME) copper price bounces back strongly this week after experiencing its steepest weekly drop since March. Spot market participants in China are scrambling for physical metal cathode and high-grade copper scrap. Meanwhile, physical market tightness pushes the Yangshan copper premium to record highs, reflecting urgent import demand from Chinese secondary smelters and fabricators.
Physical Tightness Drives LME Copper Price Recovery
Three-month LME copper price gained 0.9% to reach $13,890 per tonne in London trading. Similarly, the Shanghai Futures Exchange (SHFE) most-traded copper contract rose 0.5% to 107,430 yuan per tonne. However, analysts at ING and Citi warn that underlying demand indicators remain lackluster, pointing to supply-side bottlenecks rather than broad economic expansion. Consequently, global scrap metal recyclers and primary refined copper producers face a volatile trading environment shaped by regional inventory imbalances and potential US trade tariff adjustments.
Secondary Smelters and Scrap Supply Dynamics
In China, low visible inventories at major bonded warehouses exacerbate physical supply constraints. Secondary copper smelters actively bid up prices for clean recycled grades, including #1 copper wire and bare bright scrap, to maintain operational throughput. Simultaneously, global mining developments, such as Codelco and Pucobre securing approvals for an $870 million project in Chile, highlight long-term supply expansion plans. Nevertheless, near-term scrap metal availability and secondary refining capacity will remain key drivers of price stability across international spot markets.
ScrapInsight Commentary
The recent rebound in LME copper price highlights persistent structural tightness in Asian spot markets, driven by low onshore inventories and strong demand for secondary scrap feeds. Looking forward, downside price risks remain elevated due to sluggish downstream industrial demand and expanding primary supply pipeline from Indonesia. For global recyclers and policymakers, this volatility underscores the urgent strategic need to enhance regional scrap collection networks and accelerate circular economy integration.
