Rising inventories cause prices to continue to fall

Three-month copper on the London Metal Exchange fell 0.5%.

Three-month copper on the London Metal Exchange (LME) fell 0.5% to $9,555 a tonne, while the most-traded August contract on the Shanghai Futures Exchange (SHFE) ended down 0.1% at 78,060 yuan ($10,740.23).

Copper stocks in LME-approved warehouses rose to 180,125 tonnes as of June 27, from around 104,000 tonnes in mid-May. However, as prices fell, physical copper demand improved.

“Most copper producers have annual targets so they need to increase total purchase volume in the third quarter when prices fall,” said CRU copper analyst He Tianyu.

LME copper hit a record high above $11,100 in May but has since fallen 14%, with the contract down 4.4% in June alone, its biggest monthly decline since August 2023.

Copper consumption from wire rod makers fell by double digits in the second quarter from a year earlier, said analyst Tianyu.

Most wire rod manufacturers sign contracts based on previous monthly or weekly prices, so their consumption will improve if prices remain relatively stable, he added.

Yangshan copper’s discount tightened to $7/t on June 28, from a low of $20/t in May, indicating improving demand for copper imports into China.

However, prices may remain under pressure in the third quarter as Chinese smelters are likely to increase supply after they complete their traditional maintenance season, CRU’s He said. Demand from the copper tube sector will also be seasonally weak in the third quarter.

LME zinc fell 0.8% to $2,913 a tonne, lead fell 0.2% to $2,219 a tonne, while tin rose 0.2% to $32,800, aluminium rose 0.1% to $2,527 and nickel was almost flat at $17,290.

SHFE zinc fell 0.2% to 24,375 yuan a tonne, aluminium rose 0.4% to 20,320, while nickel rose 1.2% to 137,000 yuan, lead rose 1.6% to 19,655 yuan and tin rose 1.3% to 274,030 yuan.

Source: https://kinhtedothi.vn/gia-kim-loai-dong-ngay-2-7-ton-kho-tang-khien-giap-tiep-tuc-giam.html