Copper fell below $10 000/t as a sharp rise in global inventories prompts traders to zero in on weak conditions in the spot market.
Stockpiles on the Shanghai Futures Exchange have climbed to the highest since 2020, and there have also been a steady stream of smaller inflows into Asian depots tracked by the London Metal Exchange over the past few weeks. Inventories typically decline at this time of year, and the jump has put pressure on prices after copper spiked to a record high above $11 100 last month.
Base metals have surged in 2024 on hopes for lower US interest rates and signs that China’s economy may finally be emerging from its post-pandemic slump. Copper rose on Monday after manufacturing activity in the country expanded at the fastest pace in almost two years in May, according to private survey focused on smaller, export-oriented firms.
Even so, the ongoing rise in exchange inventories offers evidence that buyers are amply supplied for now. That’s serving as a headwind for bulls predicting that prices will soon make another push higher.
“The copper market seems much more sufficiently supplied than some traders had hoped for,” Carsten Menke, head of next-generation research at Julius Baer, said in an emailed note. “Hence a rapid turnaround of copper prices thus looks unlikely in our view and we rather expect the market to consolidate during the summer months.”
Copper fell 1.6% to $9 981/t on the London Metal Exchange as of 11:27 a.m. local time. The metal racked up a third monthly advance in May after hitting a record during the month.
All metals moved lower on the bourse, with aluminum down 0.8% and tin losing 1.2%.