Copper Prices Fluctuate Amid Bullish-Bearish Sentiment Tug-of-War

Copper prices continued to fluctuate at high levels last week, according to data from SunSirs. The price rose and then fell, standing at 108,103.33 RMB/ton as of August 14, up 0.08% from the beginning of the week and a significant 35.96% year-on-year.

The trend analysis by SunSirs shows that copper prices have been falling for three weeks and rising for nine weeks over the past three months, with a slight increase recorded last week.

LME copper inventories also showed a decline of 4.8% from the beginning of the week, standing at 207,725 tonnes as of the weekend.

The macroeconomic front saw sentiment shift from bearish to bullish over the course of last week. The market digesting weaker-than-expected US non-farm payrolls data led to softened expectations regarding Federal Reserve rate hikes, but hawkish voices within the Fed briefly reignited concerns about rate hikes mid-week.

The confirmation of cooling inflation via US CPI data, which showed a 3.4% year-on-year rise for July while core CPI fell to 2.5%, caused the probability of a September rate hike to plummet to approximately 70%. This resulted in a weakening of the US dollar that directly benefited copper prices through its financial pricing component.

On the supply side, the shortage of copper concentrate intensified, driving spot treatment charges deep into negative territory at a record low of -$175.7 per tonne on August 7.