Copper Rally Pauses on Softening Demand Signal from China

The recent copper rally appears to be losing momentum despite falling LME Copper stocks and trimmed output guidance from a major producer. Commerzbank's Barbara Lambrecht points out that China's demand signal is softening, as evidenced by a retreat in the Yangshan import premium from multi-year highs. The premium had climbed to USD 115 per ton last month, its highest level since 2022, but has now slipped back below USD 100.

The decline in the import premium at the Chinese port of Yangshan is a significant indicator of China's demand for copper imports, which accounts for a substantial portion of global consumption. The softening of demand signal from China comes as a major copper producer revised its production forecast slightly downwards due to weather conditions.

A key event scheduled today at the White House to discuss progress on domestic supply of critical minerals may also impact US copper tariffs, which have been pending since the end of June. Meanwhile, the International Copper Study Group's monthly report is expected to provide insight into recent price trends and supply-demand figures for the first half of the year.