SHANGHAI, Aug. 25 (SMM) - LME copper registered a 3.8% drop during August 22-24 as LME copper inventories grew 44,075 tonnes. Copper inventories on the LME surged 14,625 tonnes to 254,700 tonnes August 24, their highest since November 2015.

Will copper price continue to fall in the near term?

Copper should find relief as any further growth in LME copper inventories will be limited, SMM says. The growth in LME copper inventories is close to the recent delivering volume to the LME, which is expected to come to an end. Meanwhile, a large number of shorts may retreat from the market after profit-taking.

SHFE copper recently tumbled below 37,000 yuan per tonne, triggering dip-buying. Consequently, spot copper in China inverted from discounts to premiums over SHFE front-month copper. Spot premiums bounced up August 24, and are set to rise further and lend support to copper price, SMM added.

Here are also some thoughts from futures companies. Copper will stay weak in the near term until market sentiment improves, a chief research officer from Everbright Metal Products Co. told SMM. Significant growth in LME copper inventories during August 22-24 combined with weakening oil will put pressure on copper.

Copper should consolidate at lows initially and then see a slight rebound in the near term, Soochow Futures said.

Shanghai CIFCO sees limited downward room for copper, citing limited increase in short positions.

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