Copper Inventories Plummet Despite Gradual Demand Recovery

Copper inventories in major regions nationwide fell to 109,500 mt by Thursday, August 27, down 24,900 mt from the previous Thursday and down 17,600 mt year-over-year. This drop was driven mainly by supply contraction and month-end restocking.

The regional divergence is notable, with Shanghai seeing a slight build-up in inventory due to increased domestic supply arrivals, but these new arrivals were not fully absorbed downstream, indicating limited demand. Jiangsu saw domestic arrivals narrow, leading to tighter supply, while consumption showed some resilience, causing inventory to draw down further.

In Guangdong, consumption had been persistently weak, but with copper prices pulling back and buying costs falling, demand began to recover, withdrawals increased, and inventory fell further.

The major domestic refined copper rod makers' operating rate rose to 62.44% last week, up from the previous week's 61.2%, but this increase was not due to a natural, demand-driven jump. Copper prices continued to rise, slowing new orders, while some mills outside the sample shut down and shifted their orders into the sample.