Copper prices dropped on October 22, primarily due to macro fluctuations, as U.S. initial jobless claims fell to a three-month low and Middle East conflicts persisted, raising expectations of a December rate hike and weighing on copper prices.
China's refined copper spot trading notably recovered on October 22, with generally steady spot premiums and falling prices boosting downstream procurement. Scrap transactions dropped as shrinking refined-scrap copper price spread and limited compliant supply constrained trading, and downstream processors continued to procure based on rigid demand.
Refined copper retail inventory dropped notably in China as of October 22, indicating persistent tight available supply. Imported copper arrivals were limited within the week, while smelters' shipments to warehouses stayed constrained. Coupled with increased downstream purchases amid falling prices, inventory declined across major markets in China. Moving forward, the inventory decrease is expected to persist, under improving consumption and constrained arrivals.
Trading in China's copper semis markets improved on October 22, amid falling raw material prices. Regarding end-use demand, orders related to the power grid and new energy sectors continued to support overall demand resilience. However, recovery in real estate and some traditional copper-consuming sectors remained slow, leaving limited room for a substantial short-term increase in copper semis operating rates and copper demand. Close attention should be paid to the actual release of demand going forward and the impact of copper prices on consumption recovery.
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