Copper prices rebounded in China after the National Day holiday (October 1-7), while fluctuated at the LME. While macro risks persisted, the copper market fundamentals stayed strong on supply concerns, leading copper prices to remain volatile at elevated levels recently.
On October 7 local time, more than 700 workers at Chile's Centinela copper mine, owned by Antofagasta, began a strike. Though Antofagasta said it does not expect this disruption to alter its production outlook, the union stated that the impact is expected to gradually feed through to copper production in about two weeks and become more evident in November, further adding supply concerns.
China's refined copper spot trading increased notably on October 8 compared with pre-holiday levels. Available refined copper supply improved and spot premiums declined in major markets, resulting in decent downstream restocking. Trading in China's copper semis markets also improved on October 8, as some end-users restocked raw materials after holiday production. However, procurement was largely based on orders received, and market sentiment remained generally cautious.
Post-holiday, refined copper retail inventory in China increased, as most smelters maintained normal operations during the holiday and some increased shipments to warehouses, with imported copper arrivals also rising. However, the overall inventory level remained relatively low compared with the same period in previous years, and is expected to trend downwards in October due to downstream consumption recovery and concentrated smelter maintenance.
