Copper Prices Plummet as Inventories Ease Supply Concerns

Copper prices declined on Monday, retreating from recent gains as exchange inventories eased concerns over near-term supply tightness.

LME-monitored copper inventories stood at 238,575 tons on August 20, a 16% increase from their February low. SHFE-monitored stocks jumped by 28.4% last week to 89,548 tons, indicating improved availability and weighing on prices.

The rise in inventories was accompanied by a sharp narrowing of the LME cash premium over three-month copper, suggesting better near-term supply conditions. However, Zijin Mining warned that flooding at the Kamoa-Kakula copper complex in the Democratic Republic of Congo could reduce its share of production by as much as 57,000 tons this year.

The weaker US dollar helped limit the decline in copper prices, but investors remain cautious ahead of the Jackson Hole meeting and the Federal Reserve Chair's speech for clues on interest rates.