Copper prices continued falling in futures and spot markets on August 19, with expectations of a Federal Reserve rate hike in September rising and market risk appetite weak. However, the market fundamentals stayed strong with global available inventory low and demand expectations firm, supporting a high floor for copper prices.
China's refined copper trading increased on August 19, while spot premiums generally dropped slightly across major markets. Copper prices continued to decline, with spot premiums also moving lower, boosting downstream procurement. Meanwhile, some warrant cargoes have been released to supplement spot supply, further supporting an overall increase in transactions. Regarding copper scrap, transactions notably dropped, as shrinking profits and limited compliant copper scrap constrained market trading.
Trading in China's copper semis markets generally recovered on August 19, with dropping raw material prices supporting downstream raw material restocking. Transaction activity for refined copper rods improved notably, but the narrowing refined-secondary copper rod price spread, combined with invoice quota constraints on raw material procurement, weighed on secondary rod orders. Red copper plate/strip saw decent demand, but the increase in brass plate/strip orders was constrained. Meanwhile, copper tube and copper bar markets only experienced slight growth in small-batch downstream restocking for essential needs. Overall, downstream bargain-hunting buying interest persisted, but end-user demand remained relatively weak in China. With copper prices volatile at elevated levels, China's copper consumption is unlikely to notably recover in the short term, expected to remain supported by firm rigid demand.
