Copper Inventories to Fall to Record Low While Supply Peaking In 2024

Driven by wild swings in copper prices, the copper scrap market this week operated under their dominance; the sharp fluctuations in futures and spot prices profoundly affected the mentality and behavior of all links in the industry chain, and the market exhibited typical “price-driven, tug-of-war between sellers and buyers, and pulse-like transactions” characteristics.

Copper is an irreplaceable material for power generation and has become a strategic resource in the AI era. A critical period is now approaching: the US Department of Commerce must submit a latest copper market assessment report by June 30, recommending whether the US should impose import tariffs on copper cathode.

The current surge in shipping prices is mainly driven by rising shipping costs due to Middle East geopolitical disruptions, sustained restocking demand fueled by finer global division of labor and geopolitical risk aversion, and the concentrated release of stockpiling demand outside China, as Europe and the US kick off their H2 stock-up-in-advance cycle for the peak consumption season. The sharp increase in cargo volume has rapidly tightened the supply-demand balance for shipping capacity. However, the trend of shipping prices in H2 remains unclear.