Large-scale deliveries from traders ease historic pressure, copper prices continue to decline

The Zhitong Finance App learned that copper prices continued to decline on Wednesday after traders delivered copper on a large scale to the London Metal Exchange (LME), easing one of the biggest tight positions in the history of the copper market. As of press release, LME copper futures fell 0.21% to $13962.95 per ton. The day before, copper prices fell 1.2%, the biggest one-day drop since July 23.

According to reports, LME's ready-to-deliver copper inventory surged by more than 20,000 tons on Tuesday, the biggest increase since April. Toko Group contributed a significant portion of it, and other traders are also arranging to transport copper to LME warehouses. People familiar with the matter said they expect more copper to be registered in storage and obtained warehouse receipts in LME in the next few days.

This development has relieved some of the pressure on the copper market to push positions. Previously, due to traders planning for the possibility that the US Trump administration may announce import tariffs on refined copper, large amounts of copper resources have flowed to the US, and copper stocks from other regions of the world have been continuously withdrawn. According to shipping data compiled by IHS Markit, about 56,000 tons of copper arrived in the US in the first two weeks of August. Excluding July's record imports of 223,000 tons of copper, the import volume in August is basically in line with the average monthly level of the past year or so.

Notably, although the June 30 deadline for US Secretary of Commerce Lutnick to submit tariff proposals has passed, the White House has yet to announce the final policy. Producers, consumers, and traders are closely watching whether Trump will further extend current trade protection measures for semi-finished copper products to refined raw materials such as copper.

Another sign that supply constraints are easing is that the spread between spot copper and three-month copper futures, which the market is closely watching, fell to $248 per tonne on Tuesday, and once reached $545 per ton of futures on Monday. Another key one-day price spread — TOM/Next (representing the price required to roll a position backwards for a day) — has also declined somewhat, having previously soared to a level only seen during a major tight position in 2021.