On June 11, copper prices dropped in China's futures and spot markets, while rebounded at the LME, due to the highly volatile situation in the Middle East. The escalation of the Middle East situation is intensifying inflation concerns and expectations of interest rate hikes. Future developments are likely to have a significant impact on short-term copper price volatility.
Refined copper trading in China slightly increased on June 11, with spot premiums continuing growing across major markets in China. Falling copper prices led downstream enterprises to increase purchases, though overall market activity stayed mediocre due to the current consumption off-season.
China's refined copper spot inventory continued dropping as of June 11, with the pace accelerating. On one hand, Chinese copper smelters have been undergoing concentrated maintenance, while some smelters also increased exports, resulting in limited refined copper shipments to warehouses. Meanwhile, inflows of imported copper were also restricted by the unfavorable import ratio. On the other hand, downward fluctuating copper prices this week boosted downstream procurement, leading to rising outbound volumes of refined copper, also contributing to the faster inventory decline.
Trading in China's copper semis markets improved on June 11, as falling raw material prices boosted downstream purchases. However, consumption remained largely supported by rigid demand, as end-user demand stayed mediocre during the current off-season. Over the medium term, supported by growth in AI, power grids, and new energy, global copper consumption is expected to maintain growth, while short-term consumption will stay firm.
