Copper prices slightly dropped in futures and spot markets on July 28, primarily caused by bearish macro factors including escalating Middle East conflicts, rising U.S. Fed rate interest increase expectations, and the resulting high U.S. dollar index. However, the copper market fundamentals remained supportive, limiting the overall decline.
China's refined copper trading slightly increased on July 28, as falling prices boosted downstream stockpiling. Spot premiums fluctuated in China but stayed at relatively high levels, supported by the constrained supply and low inventory. Copper scrap trading stayed low, due to limited spot supply amid invoice-related issues and cautious downstream procurement due to weak end-use consumption.
Trading in China's copper semis markets remained generally mediocre on July 28. Affected by the traditional off-season for consumption, downstream copper processing activity has been weak recently. However, demand from emerging industries and the opening of the export window have helped maintain a certain level of resilience in China's copper consumption.
Moving forward, raw material supply tightness has begun to impact refined copper spot availability, while demand in China stays relatively firm on rigid consumption, together providing a solid floor for prices. Regarding macro disruptions, close attention should be paid to the Federal Reserve's future interest rate decisions, whether the U.S. will impose additional import tariffs on refined copper, and developments in the Middle East conflicts.
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