Commerzbank’s Barbara Lambrecht observes that despite falling LME Copper stocks and trimmed output guidance from a major producer, the recent Copper rally is losing momentum. She points to a retreat in China’s Yangshan import premium from multi-year highs as a cautionary sign, while also flagging upcoming International Copper Study Group data and US tariff decisions as potential drivers.
Tight stocks but softer demand indicators
"For the copper market, the monthly report from the International Copper Study Group - which is typically published between the 20th and 24th of each month - is expected to be relevant. This report includes supply and demand figures for the first half of the year and could shed light on recent price trends. Most recently, the price of copper rose following the Democratic Republic of Congo’s announcement that it would restrict exports of copper concentrate."
"LME copper stocks are continuing to fall – for the 40th consecutive day now – and, at just over 200,000 tons, are at their lowest level since February. At the same time, a major copper producer, ranked among the world’s top ten, has had to revise its production forecast slightly downwards due to weather conditions. Nevertheless, the rally on the copper market appears to have run out of steam somewhat."
"The import premium for copper at the Chinese port of Yangshan – regarded as an indicator of China’s demand for copper imports – calls for caution. It had climbed to USD 115 per ton last month, its highest level since 2022, and has now slipped back below USD 100. This signals a slowdown in the most important consumer market for copper."
"Today, an event is scheduled at the White House to discuss progress on domestic supply of critical minerals. In that context, a decision could also be made regarding US copper tariffs, which has been pending since the end of June."
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