Macro factors remained mixed but exerted diminished pressure on copper prices. Prices hovered in a tight range early last week before surging on May 23 after U.S. President Trump proposed imposing 50% tariffs on EU imports effective June 1, reigniting trade tensions. The New York Commodity Exchange (COMEX) copper price jumped nearly 4% intraday, lifting the London Metal Exchange (LME) copper prices in tandem. Nevertheless, the weekly average price last week in different markets was mixed week on week.
Mysteel's China refined copper average spot price retreated slightly by 0.59% or Yuan 464/tonne week on week to Yuan 78,064/tonne. On the LME, the three-month (3M) average settlement price fell by 0.3% or $32/tonne to $9,520/tonne. However, the COMEX main contract average settlement price rebounded by 1% week on week, with the COMEX-LME spread expanding again to $1,093/tonne on May 23.
Data Source: SHFE, LME, COMEX
Spot premiums increased week on week last week, with Mysteel's Shanghai standard refined copper spot premium falling before rising by Yuan 105/tonne week on week to Yuan 135/tonne on May 23, meanwhile, the LME Cash-3M settlement price spread expanded by $9/tonne to $25/tonne on May 23.
Data Source: Mysteel, SHFE, LME
Activity in the copper concentrate spot market remained subdued last week, with participants largely focused on Antofagasta's biannual negotiations. Trading liquidity in the spot market was thin, and limited TC (treatment charges) transactions were observed. Cost pressures on smelters have capped further downside room for prices, with TC edging slightly lower and Mysteel's spot TC index for 25% standard clean copper concentrates falling to -$44.25/dmt on May 23.
Data Source: Mysteel
Downstream copper orders showed a slight week-on-week rebound last week, temporarily bolstered by restocking demand amid the dip in copper prices. However, the incremental orders were primarily driven by leading enterprises, while shipment activities mostly declined. Copper processors saw weaker order volumes compared to April, with reduced backlog orders prompting production adjustments at some firms, including maintenance shutdowns at individual facilities. Coupled with inflows of imported supplies and the release of warehouse warrant stocks during the delivery period, China's refined copper social inventory continued the previous week's accumulation, though the overall increase remained modest.
Last week's output of refined copper rod, secondary copper rod and copper bar increased by 1.39%, 8.15%, and 1.53% week on week, respectively, while copper plate/strip and copper tube decreased by 0.64%, and 0.55%, respectively, according to Mysteel's survey of 27 refined copper rod, 27 secondary copper rod, 12 copper plate/strip, 31 copper tube, and 30 copper bar fabricators.
Data Source: Mysteel
China's refined copper social inventory rebounded further by 8,000 tonnes compared with May 15 to 143,700 tonnes on May 22; however, the bonded inventory, due to continued clearance into China's domestic market and small inflows of imported arrivals, declined further to 66,800 tonnes. On the same day, LME inventory fell further by 9.82% or 18,125 tonnes compared with May 15 to 166,525 tonnes, and COMEX inventories increased by 3.6% to 158,369 tonnes, with a decreasing growth rate.
Data Source: Mysteel
Data Source: Mysteel, LME, COMEX
Macroeconomic pressures on copper prices have eased, with prices maintaining a high-range consolidation pattern. However, vigilance remains warranted against potential price swings driven by macro risks, particularly the possible resurgence of tariff tensions. Key focuses this week include China's May Manufacturing PMI, the Eurozone's preliminary May CPI, the U.S. April Core PCE Price Index, and progress on U.S. tariffs against EU goods.
After aggressive destocking in April, China's refined copper social inventory has shifted to a modest accumulation trend since mid-May, albeit with low accumulation volume. Market dynamics are diverging: import arrivals and selective export plans are expected this week. Anticipated pre-holiday restocking demand ahead of the Dragon Boat Festival (May 31-June 1) may drive a temporary inventory drawdown. Meanwhile, the domestic market's backwardation structure is narrowing as post-maintenance supply rebounds and post-April high consumption cools, though spot premiums remain elevated despite recent softening.
While fundamental support for copper prices persists, it has weakened relative to previous months. The perceived demand softness contrasts with actual market resilience, sustaining an upward-biased price environment. Copper is expected to continue trading in tight ranges this week, with China's domestic refined copper prices trading between Yuan 77,500-79,100/tonne, LME copper futures ranging from $9,420-9,620/tonne, and COMEX from $4.60-4.76/lb. Spot premiums may stabilize with potential rebounds, with price differentials increasingly reflected in calendar spreads rather than outright levels.
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Written by Paula Xu, xuzhongping@mysteel.com
