1.August Copper Scrap Imports Slightly Declined, With Annual Growth Trend Unchanged 

According to the General Administration of Customs, in August 2024, China's imports of copper scrap and shredded copper scrap were approximately 170,000 mt, down 14.82% MoM, but up 9% YoY. Despite the MoM decline, the annual growth trend in copper scrap imports remains intact. (HS code 74040000)

In terms of import sources, the US, Japan, and Malaysia continued to be the top three. Imports from the US were 29,064 mt, down 24.48% MoM; from Japan, 19,156 mt, down 8.02% MoM; while imports from Malaysia showed some resilience with a 22.11% MoM increase, reflecting its unique position in the copper scrap supply chain.

Overall, August saw a moderate increase in copper prices, with overseas markets remaining cautious, leading to a MoM decline in copper scrap imports. This performance aligns with expected seasonal adjustments, yet YoY growth remains robust. Looking ahead to September, given that the traditional "Golden September and Silver October" consumption peak season has not yet shown a significant boost, expects copper scrap imports to remain stable or continue to decline slightly. Market participants should closely monitor domestic and international economic dynamics, policy directions, and changes in downstream demand.

2.China Announced Fiscal Stimulus Measures, Boosting Copper Prices

LME copper opened at $9,948.5/mt overnight, initially fluctuating rangebound before declining to a low of $9,945/mt. It then rose steadily, reaching a high of $10,090/mt near the close, and finally closed at $10,090/mt, up 2.95%. Trading volume reached 39,000 lots, and open interest was 288,000 lots. Overnight, the most-traded SHFE copper 2411 contract opened at 78,470 yuan/mt, initially dipping to 77,880 yuan/mt, then rising to a high of 78,960 yuan/mt during the session, and finally consolidating to close at 78,880 yuan/mt, up 1.91%. Trading volume was 81,000 lots, and open interest was 177,000 lots. Macro side, the US Q2 real GDP annualized rate final value recorded 3%, consistent with expectations and previous values. Initial jobless claims for the week ending September 21 were 218,000, below the expected 225,000, marking a new low since the week of May 18. US Fed Governor Cook expressed full support for last week's 50 basis point rate cut, and the US dollar index fluctuated downward, benefiting copper prices. Additionally, after easing monetary policy to boost the economy, China announced fiscal stimulus measures, leading to gains in global stock markets and boosting copper prices. Fundamentally, supply side, the widening SHFE copper Backwardation structure led to increased selling by traders, combined with a large influx of imported goods, increasing copper cathode spot supply and putting pressure on premiums. Demand side, with copper prices fluctuating at highs, new orders from downstream decreased, and some downstream sectors had already completed restocking, leading to sluggish spot market transactions. However, social inventory continued to fall. According to , as of Thursday, September 26, SMM copper inventory in major regions nationwide decreased by 11,200 mt from Monday to 154,000 mt, and by 38,000 mt from last Thursday, marking the 12th consecutive week of destocking, with the destocking speed accelerating. Total inventory was 81,000 mt higher compared to 73,000 mt in the same period last year. Price side, with macro and fundamental resonance, copper prices are expected to fluctuate upward.

 

3. During the week, copper stocks in major regions nationwide decreased by 11,500 mt

As of Thursday, September 26, copper stocks in major regions nationwide fell by 11,500 mt from Monday to 154,300 mt and decreased by 38,300 mt compared to last Thursday, marking the 12th consecutive week of destocking, with the speed still accelerating. The inventory hit a new low since the Chinese New Year. Compared to Monday, most regions saw a decline in stocks, with only Chongqing experiencing a slight increase. Total inventory was 81,200 mt higher compared to 73,100 mt in the same period last year, with Shanghai 53,500 mt higher, Jiangsu 11,300 mt higher, and Guangdong 19,300 mt higher.

Specifically, Shanghai's inventory decreased by 6,100 mt to 110,800 mt from Monday, and Jiangsu's inventory fell by 700 mt to 24,000 mt. Although stocks in east China continued to decline, the rate slowed down due to increased arrivals of imported copper. Last week, typhoon impacts reduced port operation efficiency in Shanghai, but this week saw a return to normal, increasing domestic warehouse arrivals. Guangdong's inventory decreased by 4,500 mt to 24,100 mt. Although arrivals in Guangdong warehouses increased slightly, outflows rose significantly, mainly due to downstream pre-holiday restocking, as reflected in the continuous rise in Guangdong's daily outflows.

Looking ahead, it is reported that imported copper will continue to increase next week, and with the National Day holiday, holders are expected to send more to warehouses, leading to an increase in total supply compared to this week. On the downstream consumption side, most have completed restocking this week, and the demand for further restocking next week will decline, with some downstream processing enterprises taking a five-day break. Total demand will decrease significantly compared to this week. Therefore, we expect a scenario of increased supply and decreased demand next week, with post-holiday inventory likely to rise, but the increase may not exceed last year's post-holiday accumulation of 44,200 mt.

4.In August, copper tube imports and exports both declined MoM, but YoY growth remained significant

According to customs data, in August 2024, copper tube imports were 1,465.6 mt, down 16.2% MoM, up 25.1% YoY; from January to August, cumulative imports were 14,276.0 mt, up 38.95% YoY. In August, copper tube exports were 32,177.7 mt, down 1.7% MoM, up 24.2% YoY; cumulative exports from January to August were 250,076.5 mt, up 14.4% YoY.

In August, China's copper tube import volume declined MoM, as expected. The Chinese market entered the off-season, with air conditioning companies focusing on sales. Air conditioner production schedules showed a decline of over 10%, with domestic sales dragging down performance and exports remaining strong. However, due to last year's low base, YoY growth was still significant.

In August, China's copper tube export volume also declined MoM. After the peak season, overseas demand for copper tubes also decreased significantly, and the YoY growth rate showed a decline.

By country, there were no abnormal performances in the import and export shares in August. Reviewing July, China's copper tube imports from Iran accounted for 12%, but this month it was less than 5%, indicating that the high import volume from Iran in August was not sustainable. However, imports from Italy surged to 7%.

Overall, in August, the air conditioning market was in the off-season, and copper tube demand was insufficient. The continued MoM decline in imports and exports was expected, with YoY growth still maintaining its pace. Looking ahead to September, the air conditioning market has not yet entered a significant H2 peak season, and copper tube companies do not expect an increase in operating rates. It is anticipated that the overall import and export volume in September will continue to decline slightly.

5.Copper Prices Surged, Activity in Linyi Metal City Secondary Copper Market Increased

According , from September 18 to September 20, the weekly average price of #1 copper cathode was 75,013 yuan/mt, up 2.64% WoW; the weekly average price of bare bright copper in East China Non-Ferrous Metal City was 69,266 yuan/mt, up 2.25% WoW; the weekly average price of baled copper cable scrap was 69,466 yuan/mt, up 2.25% WoW.

reports that although copper prices rose last week, secondary copper traders in Linyi Metal City indicated that the supply of secondary copper did not significantly increase. This is mainly because secondary copper holders expect further price increases, leading to a reluctance to sell and slow release of inventory. Demand side, due to the delayed implementation of Document No.783, many secondary copper rod plants have resumed production or are preparing to resume operations, significantly boosting demand for secondary copper. Traders in Linyi Metal City noted that due to limited supply increases and higher demand, most traders have low inventory levels. Overall, with rising copper prices and the resumption of secondary copper rod plants, the throughput of secondary copper in Linyi Metal City is expected to show an upward trend.

This week, domestic announcements of RRR cuts, interest rate cuts, and reductions in existing mortgage rates have spurred bullish market sentiment, causing copper prices to surge. As of the time of writing, the most-traded SHFE copper contract reached a high of 78,130 yuan/mt, benefiting the secondary copper market.

Looking ahead to this week, copper prices are expected to remain in an upward fluctuation due to optimistic market sentiment. Meanwhile, secondary copper holders have low expectations for continued price increases. Traders in Linyi Metal City predict that secondary copper procurement this week may exceed last week's levels. Additionally, the resumption of secondary copper rod plants continues, with high demand for raw material reserves, leading to stronger consumption of secondary copper. In summary, the activity in the secondary copper market in Linyi Metal City is expected to remain higher than last week.