Copper prices slightly rebounded in China's futures market on August 31 while dropped in the spot market. Meanwhile, the LME is closed for trading on August 31 due to the Summer Bank Holiday in the UK.
China's refined copper trading continued dropping on August 31, as the nearby Back structure spread widened further. At the same time, holders showed limited inclination to sell at lower prices, keeping spot premiums elevated and firm. Downstream enterprises therefore showed weak willingness to accept high prices, leading to a continued decline in overall transaction volumes. Trading in China's copper semis markets also stayed relatively weak, as mediocre end-use demand and volatile copper prices led to cautious downstream procurement. In contrast, scrap trading notably increased with the refined-scrap copper price spread widening and upstream holders actively trading.
Refined copper retail inventory in China kept dropping as of August 31. Recent market arrivals and warehouse inflows remained relatively low. Additionally, over the weekend, some downstream enterprises had essential restocking needs, leading to a slight increase in outflows. As a result, overall inventory continued to decline and remained low, supporting copper prices.
Mysteel's imported copper concentrate spot treatment charge (TC) index stood at -$194.2/dmt as of August 28, continuing falling week on week, indicating extreme supply tightness. With mine supply growth slow yet demand expansion strong, TCs are unlikely to recover in the near term, leaving smelters with severe losses, and refined copper production has already been impacted.
