Copper prices increased further in futures and spot markets on August 4, on both macro and fundamental support. On one hand, progress toward ending the Middle East conflict and expectations for the reopening of the Strait of Hormuz revived market sentiment. On the other hand, LME copper futures inventory continued to decline rapidly as refined copper has been flowing into the U.S. market, further tightening available global supply.
China's refined copper trading decreased on August 4, despite falling spot premiums across major markets. However, as refined copper shipments from Chinese smelters may stay limited in the near term, spot premiums are unlikely to decline sharply.
Regarding copper scrap, the recent high temperatures have affected dismantling and recycling operations, limiting the increase in copper scrap availability. Processing enterprises generally focused on raw material quality and invoice compliance, and supply of invoiced raw materials remained relatively tight. Additionally, while the refined-scrap copper price spread stayed favorable, downstream demand remained in the off-season, with no significant increase in orders from copper rod and wire and cable enterprises. Most copper scrap processors maintained cautious production levels and controlled raw material inventory.
Trading in China's copper semis markets remained weak on August 4. During the current demand off-season, the recent rebound in copper prices suppressed downstream demand. However, with growing momentum in emerging sectors such as new energy, some copper semis manufacturers may show interest in advance stockpiling, and exports of high-value-added copper semis see growth, together supporting resilient copper consumption in China.
