Copper prices have edged down from recent record highs, spurred by indications that softer demand from China could alleviate global supply pressures. Trading on the London Metal Exchange saw a reversal of a two-day upward trend, with futures on the Comex in the United States similarly experiencing a decrease. This shift comes as market participants assess evolving demand dynamics in key consumer regions.
Analysts at Jinrui Futures Co noted that seasonal demand from fabricators in China, the world’s largest copper consumer, has diminished. This decline is expected to increase the availability of Chinese metal for export, potentially easing some of the tightness observed in global markets. The analysts closely monitor import and export trends to gauge overall market sentiment and predict price movements.
Further evidence of this softening demand can be seen in the Yangshan copper premium, a key indicator reflecting the price traders are willing to pay to import copper into China. This premium has fallen to its lowest level since July, signalling reduced appetite for imported metal within the Chinese market. Lower premiums often suggest that domestic supply is sufficient to meet current demand, lessening the need for imports.
These developments suggest a potential shift in the short-term dynamics of the copper market. While long-term supply concerns persist, the near-term outlook is being tempered by indications of reduced Chinese demand. Market participants will be closely monitoring import and export trends, as well as any further adjustments in the Yangshan copper premium, to gauge the evolving balance between supply and demand.
