SMM Analysis: LME Copper Inventory Slumping by Transfer, Weak Demand Encumbers Copper Price

Published: Nov 23, 2017 10:52 (GMT+8)
LME Inventory continued to drop over 7,000 tonnes last night. LME Copper rebounded under this influence. SHFE Copper followed with LME with less strength.

SHANGHAI, Nov.22 (SMM)-LME Inventory continued to drop over 7,000 tonnes last night. LME Copper rebounded under this influence. SHFE Copper followed with LME with less strength. LME Copper has broken top of downward channel since mid-October but SHFE Copper finished at top of the channel today.

Recent drop of LME Copper inventory has driven copper price with weakened US dollar. LME Copper inventory on Nov.21st was 234,375 tonnes, dropping 40,250 tonnes compared with 274,625 tonnes in late October. We need to think over the reason of dropping inventory.

Up to Nov.17th, copper inventory at SHFE was 162,800 tonnes, up 54,905 tonnes compared with 107,892 tonnes on Oct.27th with 51% rise.

On Nov.21st, copper inventory at COMEX was 209,624 short tonnes, up 3,525 short tonnes compared with last month.

With regard to total number of global three dominant inventory, the inventory is still in rise. SMM learned that the drop in inventory of LME Copper is not driven by better global demand but inventory’s transfer to China.  

Profit-gaining window for import opening, huge amount of imported copper flows in

Since September profit-gaining window for imported copper spot has been open, which is the main reason for monthly rise of number of imported copper. On the other hand, premium of copper spot for domestic trader has existed since September. Also holiday in October has slowed down stockup speed of downstream enterprise, which leads to great demand of stockup after holiday. With the yearend coming, traders have some difficulties in import procedures. Their active import actions previously is another reason for rising number of imported copper.

Seasonal consumption weakens, Copper premium turns into discount

Huge inflow of imported copper in November causes enlarging discount of domestic copper spot. SMM learned that the supply is basically sufficient now.

Xu Jinqiao, SMM analyst says, recent days see copper import in loss status. Close of profit-gaining window slows down import speed. Despite of this, there is sufficient supply in domestic market. Operating rate of smelting plant has been in high level till yearend.

As per latest statistics, operating rate of copper pipe enterprises in October is 78.92%, rising 6.22% on yearly basis but drop 1.02% on monthly basis.

Xu also mentions that downstream demand has weakened due to seasonal reason. With slow speed of inventory consumption, discount of copper spot will still exist.

Generally speaking, consumption will keep weak in the short term with sufficient supply. Continuous discount of copper spot will lower core of copper price but the price contradiction is not very fierce yet. The volatile tendency will not dominate. Need to focus on transfer pace of LME Copper inventory to SHFE inventory.


For news cooperation, please contact us by email: gaotian@smm.cn or service.en@smm.cn. 

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn
For more information on how to access our research reports, please contact:service.en@smm.cn
Related News
KGHM and South32 launch US$725m Sierra Gorda expansion, lifting copper capacity 26%
14 hours ago
KGHM and South32 launch US$725m Sierra Gorda expansion, lifting copper capacity 26%
Read More
KGHM and South32 launch US$725m Sierra Gorda expansion, lifting copper capacity 26%
KGHM and South32 launch US$725m Sierra Gorda expansion, lifting copper capacity 26%
KGHM and South32 have broken ground on a fourth grinding line at the Sierra Gorda copper-molybdenum mine in Chile's Atacama region. The US$725 million expansion runs for three years from January 2027, with completion by late 2029 and full output in H2 2030. Ore processing capacity rises 26%, from 131,000 tonnes per day to 165,000 tpd. Annual copper output is projected to climb from 165,000 tonnes in 2025 to 195,000 tonnes, with 6,000 tonnes of molybdenum, 58,000 ounces of gold and 1.7 million ounces of silver as by-products. The project creates over 900 direct jobs and is funded from operating cash flow and debt. Unit operating costs are expected to fall about 10%.
14 hours ago
Emerita Extends Final Review of Iberian Belt West PFS, Release Expected in Coming Weeks
15 hours ago
Emerita Extends Final Review of Iberian Belt West PFS, Release Expected in Coming Weeks
Read More
Emerita Extends Final Review of Iberian Belt West PFS, Release Expected in Coming Weeks
Emerita Extends Final Review of Iberian Belt West PFS, Release Expected in Coming Weeks
Emerita Resources has provided an update on the Preliminary Feasibility Study (PFS) for its Iberian Belt West polymetallic project in Spain, saying the study is well advanced but remains under final technical review.​ The company said the review process has been expanded to include additional technical and quality-assurance oversight before publication. As a result, Emerita now expects the PFS to be released in the coming weeks rather than within the previously indicated timeframe.​ Iberian Belt West hosts copper, zinc, lead, gold and silver mineralization and is one of Emerita’s principal development-stage assets in Spain. The PFS is expected to provide updated detail on the proposed mine plan, processing configuration, capital requirements, operating costs and project economics.​ Emerita said the additional review work is intended to ensure consistency and completeness across the technical disciplines contributing to the study before it is finalized.​ The company did not announce a revised specific publication date, and no new production, capital or economic figures were disclosed in the latest update.​ The extended review delays the next major technical milestone for Iberian Belt West, but the company continues to indicate that the PFS is nearing completion. For the copper market, the significance of the study will depend on the production profile and project economics ultimately disclosed, particularly the contribution of copper relative to the project’s other payable metals. Attention will therefore remain on the timing of the PFS release and whether the final study materially changes the project’s development outlook.
15 hours ago
Cascadia Intersects 75.55 m at 1.19% Cu at Carmacks Copper-Gold Project
15 hours ago
Cascadia Intersects 75.55 m at 1.19% Cu at Carmacks Copper-Gold Project
Read More
Cascadia Intersects 75.55 m at 1.19% Cu at Carmacks Copper-Gold Project
Cascadia Intersects 75.55 m at 1.19% Cu at Carmacks Copper-Gold Project
Cascadia Minerals has reported additional drill results from its 2026 exploration programme at the Carmacks copper-gold project in Yukon, Canada, with new step-out drilling extending mineralization at Zone 2000S beyond the boundaries of the existing Mineral Resource.​ Drill hole CD-26-058 returned 75.55 metres grading 1.19% copper, 0.97 g/t gold, 10.4 g/t silver and 335 ppm molybdenum, equivalent to 2.18% copper-equivalent. The interval included 48.66 metres grading 1.61% copper, 1.39 g/t gold, 15.1 g/t silver and 475 ppm molybdenum, equivalent to 3.03% CuEq.​ Within the same hole, a higher-grade interval of 14.50 metres returned 2.30% copper, 2.68 g/t gold, 29.5 g/t silver and 1,015 ppm molybdenum, equivalent to 5.08% CuEq.​ A second hole, CD-26-059, intersected 93.99 metres grading 0.96% copper, 0.70 g/t gold, 4.6 g/t silver and 919 ppm molybdenum, equivalent to 1.94% CuEq. This included 63.97 metres at 1.26% copper, 0.96 g/t gold, 6.3 g/t silver and 1,049 ppm molybdenum, equivalent to 2.52% CuEq.​ Cascadia said the latest results continue to expand mineralization at Zone 2000S beyond the limits of the current Mineral Resource and highlight the higher-grade nature of the extension. The reported drill intervals represent drilled thicknesses, with true widths estimated at approximately 60–70%.​ The latest step-out results indicate that copper-gold mineralization at Zone 2000S extends beyond the boundaries of the current Carmacks Mineral Resource. The broad intervals and higher-grade internal zones could support future resource expansion if additional drilling confirms continuity. However, the new intersections have not yet been incorporated into an updated Mineral Resource Estimate, meaning their ultimate impact on project scale and mine planning remains to be determined.
15 hours ago