Copper prices fluctuated upwards in China's futures and spot markets on August 12, with LME prices slightly falling yet staying high due to supply concerns. The U.S. July CPI was in line with expectations, with the market maintaining a 45% probability of a Fed rate hike in September. The U.S. dollar index edged higher, which is expected to exert short-term pressure on copper prices.
China's refined copper trading decreased on August 12, due to sluggish downstream demand amid elevated copper prices. Spot premiums dropped across major markets in China, as traders actively lowered prices to promote sales. Copper scrap trading also declined on August 12, with spot availability constrained and consumption mediocre.
Indonesia's copper smelting sector faces supply uncertainty after PT Smelting's Gresik smelter suspended operations following a boiler leak on August 8, according to market sources. The smelting facility would remain offline for several weeks, with no confirmed restart date. Meanwhile, PT Freeport Indonesia said on August 10 that its Manyar smelter is scheduled to resume production in September as copper concentrate output from the Grasberg mine gradually recovers. Consequently, Indonesia copper smelting faces near-term disruption yet long-term recovery.
Trading in China's copper semis markets remained weak on August 12, with elevated copper prices and demand off-season constraining any notable growth. In the short term, traditional end-use sectors such as home appliances may continue to procure based on rigid needs. However, the power grid, new energy, data centers, and high-end equipment manufacturing sectors could provide medium-to-long term structural growth.
