Copper prices fluctuated on November 4, amid mixed macro and fundamental factors. On the macro side, Democrats won in the U.S. midterm elections, regaining control of both the House and the Senate. Attention should be paid to potential changes in the refined copper tariff policy and development of the U.S.-Iran conflict going forward. On the fundamentals side, LME copper inventory has been rising recently, but the market should keep focusing on the regional distribution of global copper inventory and possible flows driven by future tariff policy changes.
China's refined copper spot trading slightly increased on November 4. Spot premiums rose notably, hitting a new year-to-date high. Although spot copper prices dropped, the combination of high premiums and a steep backwardation futures spread limited the release of downstream demand. The recent rise in premiums is not demand-driven, but rather a passive increased caused by supply contraction, with limited demand-side acceptance.
Meanwhile, upstream traders in the copper scrap market saw their inventory fall into substantial losses, with available spot scrap supply tightening markedly. Downstream processors generally showed weak purchasing interest, and compliant invoiced copper scrap was both expensive and scarce, leading to a sharp decline in actual transactions.
Trading in China's copper semis markets varied, with refined copper rod orders declining due to elevated processing fees, while other semis experienced moderate improvement in orders, as raw material prices slightly declined. Market sentiment remained cautious, with participants awaiting further declines in copper prices, and overall recovery in end-use demand remained slow.
