Copper prices remain supported despite easing tightness after LME inventories surged, reducing the cash-to-three-month spread to $176 per tonne.
LME copper inventories climbed by over 55,000 tonnes in two sessions, easing tightness in the physical market. The cash-to-three-month backwardation narrowed to $176 per tonne from a peak of $545 earlier this week, signaling reduced near-term supply pressure.
Despite the recent stock build, copper remains vulnerable due to months of inventory outflows and anticipated tariffs. Tight physical supply, particularly in the U.S., continues to support prices, though further inflows could introduce volatility.
China’s refined copper production rose 1.3% year-on-year in July to 1.3 million tonnes, driven by higher smelter margins from elevated sulphuric acid prices. The increase in output may help alleviate some supply constraints in the medium term.