China's Copper Prices Rebound Amid Tight Supply and Firm Demand

Copper prices in China's futures and spot markets rebounded on August 17, following a volatile session. The LME copper price fluctuated amid mixed macro factors affecting copper prices. The available refined copper supply remained tight, while firm demand expectations supported an elevated price floor.

The contract rollover for refined copper in China's trading slightly increased on August 17. However, spot premiums surged across major markets, with the exception of Guangdong where inventory notably rose. Downstream scrap stockpiling was suppressed by the tax invoice quota issue and sluggish end-user demand.

Refined copper retail inventory in China grew as of August 17 due to holders actively delivering to warehouses amid a wide backwardation structure in the futures market. Downstream refined copper procurement remained mediocre, leading to the inventory growth. Short-term copper consumption in China is expected to remain supported by rigid demand.