Copper Edges Up as China's Factory Activity Returns to Growth

Copper prices are heading for their third consecutive monthly gain as China's factory activity returns to growth, according to official data. The Shanghai Futures Exchange (ShFE) reported a 17.8% drop in copper inventories last week to 38,744 tons, the lowest since January 2024.

This decrease in warehouse stocks suggests that companies are stockpiling metal and shipping is slowing ahead of China's National Day holiday, which starts on October 1st. The lower inventory levels may lead to a scarcity of nearby copper, making it more valuable for immediate delivery.

However, not all price gauges indicate a surge in demand. China's domestic premium, which is the extra paid for prompt delivery versus benchmark prices, cooled to 1,050 yuan a ton from 1,375 yuan. This combination suggests that the market may be seeing holiday-driven logistics tightness rather than a clean increase in end-user demand.