Copper Cathode Social Inventory Sees Significant Drawdown, All Regions Simultaneously Digest Spot Copper [SMM Weekly Data]

[SMM Analysis: Millberry Payability Returns to High Levels—Why Are No. 1 and No. 2 Copper Scrap Lagging?]According to SMM market research, Millberry payability has returned to 98%-99%, while No. 1 copper scrap is quoted at 95.5%-96.5% and No. 2 at 94.5%-95.5%. Market tightness is therefore concentrated in clean, high-grade material.

Peru’s new government is targeting at least US$33 billion in mining investment over the next five years, while moving to accelerate approvals for exploration and extraction projects in an effort to convert the country’s extensive mineral resources and project pipeline into new production. Prime Minister Luis Galarreta told Congress that President Keiko Fujimori’s administration, which took office in July, plans to authorize 240 exploration and extraction projects this year. Private companies are expected to provide the investment, while the government intends to focus on legal certainty, more predictable permitting and faster decision-making. Officials will seek to reduce delays and overlapping procedures without weakening environmental or social requirements. The push is particularly significant for the copper market. Peru produced 2.77 million tonnes of copper in 2025, up 1.2% year on year, according to the Ministry of Energy and Mines, marking the country’s highest annual copper production on record. Peru remains one of the world’s largest copper-producing countries, meaning improvements in project execution could have meaningful implications for longer-term global mine supply. The investment target also comes against the backdrop of a sizeable existing project pipeline. MINEM’s 2026 Mining Investment Project Portfolio comprises 66 projects with combined estimated investment of US$64.08 billion, while eight mining projects representing around US$7.62 billion had already been identified for the start of execution during 2026. For the copper market, the key issue is therefore less Peru’s geological potential than the speed at which projects can move through permitting, financing and construction. The Fujimori government’s plan to authorize hundreds of projects and reduce administrative bottlenecks could help unlock part of Peru’s large copper development pipeline, although the eventual production impact will depend on which projects actually progress into construction and operation.

Looking ahead to tomorrow, SMM recorded a social inventory of 70,800 mt in the Shanghai region, down 12,300 mt compared to last Thursday; a social inventory of 16,300 mt in the Jiangsu region, down 4,100 mt compared to last Thursday. The combined inventory in the two regions in east China decreased by 16,400 mt, with the destocking magnitude exceeding market expectations. Supply side, affected by the persistently unfavorable SHFE/LME price ratio, port arrivals from outside China have decreased, and coupled with some shipment delays, the supplement of imported copper to the spot market has been relatively limited. Demand side, after last week's slight correction in copper prices, there was a release of dip-buying demand from downstream; at the same time, the backwardation price spread between futures contracts once widened, increasing suppliers' willingness to sell, and accelerating the flow of cargo in the market, collectively driving a significant decline in inventory. Although intraday buying sentiment rebounded, transactions for standard-quality copper only occurred after successive downward adjustments in offers, reflecting that downstream acceptance of higher premiums remains limited. On balance, against the backdrop of significant destocking in east China and low import arrivals providing support for premiums, while downstream still mainly adopts just-in-time procurement on dips and suppliers retain a willingness to sell, spot prices against the SHFE copper 2609 contract are expected to maintain a premium tomorrow, with the overall center likely to gradually stop falling and stabilize, and the room for further significant declines is relatively limited.