Copper prices rebounded in China's futures and spot markets on August 17, while fluctuated at the LME. Mixed macro factors kept copper prices volatile, while the tight available refined copper supply and firm demand expectations supported an elevated price floor.
China's refined copper trading slightly increased on August 17. During the contract rollover, holders' selling willingness was subdued, and spot premiums generally surged across major markets in China, except for Guangdong where inventory notably increased. Amid high prices and limited spot supply, transactions of refined copper stayed relatively low. Regarding copper scrap, rising copper prices widened the refined-scrap copper price spread and increased spot supply, resulting in growing trading. However, the tax invoice quota issue and sluggish end-user demand continued to suppress any significant increase in downstream scrap stockpiling.
Refined copper retail inventory in China notably increased as of August 17. Due to the contract rollover and wide backwardation structure in the futures market, holders actively delivered to warehouses. Meanwhile, downstream refined copper procurement remained mediocre, together leading to the inventory growth.
Trading in China's copper semis markets generally dropped on August 17, as rising raw material prices and weak end-user orders constrained market activity. Overall, high copper prices clearly dampened downstream consumption, with end-users primarily purchasing based on rigid needs. Short-term copper consumption in China is expected to remain supported by rigid demand.
