Copper prices rebounded in futures and spot markets on August 20, fluctuating this week amid macro uncertainties. The Middle East conflicts remained volatile, with geopolitical uncertainty continuing to suppress market sentiment. Meanwhile, the minutes from the Federal Reserve's July meeting released more hawkish signals, leading concerns over potential rate increases to persist. However, the U.S. Treasury announced an expansion of its long-term Treasury buyback program, resulting in a recovery in market risk appetite and supported the growth in copper prices.
China's refined copper trading increased on August 20 despite recovering prices, and spot premiums generally dropped across major markets. Downstream enterprises procured in fear of further price growth, and holders actively lowered quotes for sales, leading to rising trading. Copper scrap transaction in China surged, as some upstream merchants actively replenished inventory. However, purchases among downstream scrap processors remained divided, with a clear preference for raw materials with compliant invoices.
Refined copper retail inventory in China dropped this week. Following the contract rollover, inbound deliveries of both domestic and imported copper remained relatively limited during the week, resulting in modest warehouse arrivals. Meanwhile, falling copper prices mid-week boosted downstream procurement, together resulting in an overall inventory decline.
Trading in China's copper semis markets dropped on August 20, as rebounding raw material prices deepened market caution. During the current consumption off-season and volatile copper prices, supply and demand dynamics remained weak, with a notable growth in consumption unlikely.
