Copper prices dropped in futures and spot markets on June 18, suppressed by the rising U.S. dollar index and market expectations of Fed interest rate increases. Additionally, uncertainty over the U.S.-Iran peace agreement intensified after scheduled talks in Switzerland were canceled, reversing earlier optimism that had lifted prices.
China's refined copper spot trading continued rising on June 18, driven by pre-holiday restocking ahead of the Dragon Boat Festival and falling prices. Spot premiums remained under pressure, which are expected to decrease further as holders may start clearing inventory post-holiday approaching the month-end.
Refined copper traders' and bonded inventories both dropped in China as of June 18. On one hand, limited refined copper arrivals and downstream pre-holiday stockpiling resulted in inventory declines at spot warehouses. On the other hand, continued exports also led inventory to drop at boned warehouses.
Trading in China's copper semis markets stayed generally mediocre on June 18, due to sluggish end-user demand during the off-season. Copper rod and copper tube transactions picked up, as price pullbacks encouraged downstream stockpiling. However, trading in the copper plate/strip and copper bar markets remained limited, with overall market sentiment staying cautious.
Looking ahead, with the deadline for U.S. tariff decision on refined copper approaching, the arbitrage-driven U.S. copper stockpiling will continue and support copper prices. However, attention should also be paid to the progress of the U.S.-Iran agreement signing and the Federal Reserve's policy stance.
