Mysteel's China copper Market Sentiment Index (MSI) rose to 42.76 last week, up by 2.95 points week on week, but remained below the threshold of 50, indicating only a modest recovery in market confidence.
Data Source: Mysteel
Among 87 surveyed market participants, 39% held a bearish or cautiously bearish outlook, 33% were bullish or cautiously bullish, and 28% expected the market to consolidate. Sentiment among copper traders improved significantly, and also showed some easing among copper processing enterprises. However, smelters and financial institutions remained pessimistic, with their market confidence declining.
The proposed 50% tariff on U.S. copper imports triggered significant price divergence across global markets last week, with COMEX copper prices surging, while LME and SHFE prices declining to varying degrees, reflecting heightened macro-driven price volatility. On the fundamentals side, China's refined copper production remained in a high-output phase, with domestic supply continuing to rise, fueling expectations of social inventory accumulation. However, due to the current spot market pressure, any significant inventory buildup is likely to be limited. Meanwhile, falling copper prices drove a clear week-on-week improvement in domestic consumption last week, underscoring the key role of price in shaping the market demand.
Although export potential remains, the narrowing price spread between China's domestic and overseas markets caused by recent divergence in price trends is expected to lead to a month-on-month decline in China's copper exports in July. Overall, copper market disruptions are mounting, with the U.S. tariffs having a particularly strong impact on price movements both in China and in overseas markets. Going forward, subsequent copper trade flows are also expected to be shaped by tariff changes.
Meanwhile, the fundamentals in China's copper market have recently offered weaker support for copper prices, increasing pressure on any potential price rebound. Nonetheless, market buying interest will still help establish a solid floor. As a result, Mysteel expects China's copper prices to stay rangebound at Yuan 77,800-79,500 tonnes this week.
For more in-depth insights, long-term outlook, and comprehensive data on China's copper market, contact us via <xuzhongping@mysteel.com> to subscribe to Mysteel Copper Weekly/Monthly, and Mysteel Copper Database.
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Written by Mingyuan Wang, wangmingyuan@mysteel.com
Edited by Paula Xu, xuzhongping@mysteel.com
