Copper prices increased further in futures markets on August 3, while slightly dropped in China's spot market as premiums generally dropped across major markets, amid mediocre downstream consumption and slightly recovered supply. On the macroeconomic front, movements in geopolitical conflicts, potential U.S. import tariff on copper, and inflation status continued to influence market sentiment, leading to frequent fluctuations in copper prices recently.
China's refined copper trading increased on August 3, as traders' activity improved at the beginning of the month. Copper scrap trading also recovered, amid the wide refined-scrap copper price spread, though scrap processors' raw material procurement remained limited to rigid needs.
Refined copper retail inventory in China continued increasing as of August 3, due to recovering supply from increased import arrivals and gradually ending smelter maintenance. Sluggish end-user consumption during the current demand off-season also contributed to the inventory build. However, inventory stayed at relatively low levels overall compared with previous years, supporting a firm floor for copper prices.
Trading in China's copper semis markets stayed generally weak on August 3, with sluggish end-use orders and elevated prices suppressing consumption. Moving forward, though low domestic spot inventory will provide support for copper prices, the slow growth of end-use demand may limit upside potential.
