Tight Supply Drives Copper Prices Higher
Copper prices rose in futures and spot markets on August 25 due to concerns over supply. Macroeconomic sentiment was volatile, but fundamental factors remained supportive of copper prices.
Refined copper inventory outside the US remained tight, with China's inventory declining from an already low level and LME cancelled warrants increasing significantly. This supported copper prices from a supply perspective.
China's refined copper trading fell on August 25, with spot supply tightening and spot premiums rising across major markets in China. Copper scrap transactions decreased due to limited available scrap and rigid purchasing needs of downstream processors.
The copper semis market in China remained mediocre, with processing fees for refined copper rods being adjusted upwards leading to a subdued response from the market. Offers for secondary copper rods declined as month-end shortages in scrap copper invoice quotas constrained production and market supply.