Concerns over demand increased, SHFE copper continued to weaken [SHFE Market Closing Review on April 3]

SHFE copper opened lower in the morning, fluctuating downward throughout the day, and closed down 1.28%. After the US imposed reciprocal tariffs, the market became more inclined to worry about the demand outlook, and US copper also continued to pull back, leading to further weakness in SHFE copper.

With the US reciprocal tariffs in place, the market is concerned about subsequent economic growth, sentiment is bearish, and metal demand expectations are also dragged down. US copper continues to pull back, and SHFE copper remains weak. Jinrui Futures stated that the tariff policy exceeded expectations, potentially causing market concerns about short-term economic growth to intensify. Overseas assets have already started to significantly correct, and SHFE copper is also declining. Considering potential negotiation space, concerns may have room for repair. If no more macro negatives emerge, combined with this year's relatively healthy fundamentals, the medium and long-term bullish direction for copper prices remains unchanged, and attention should be maintained on buying opportunities after risk release.

Due to previously high copper prices and increased arrivals in Guangdong, domestic refined copper social inventory stabilized at the beginning of the week. However, as copper prices continued to pull back during the week, downstream purchasing enthusiasm increased. As of Thursday, SMM's mainstream regional copper inventory nationwide dropped significantly by 23,600 mt from Monday to 313,600 mt, achieving five consecutive weeks of weekly destocking. Currently, it has pulled back by 63,400 mt from the year's high and is 74,400 mt lower YoY. Regarding the supply and demand side, Minmetals Futures stated that on the raw material side, copper concentrate TCs have not yet stopped falling, and supply disruptions at the mine end continue to tighten copper ore supply. The ongoing decline in TCs supports copper prices. Overall, copper prices may continue to face pressure under demand concerns.