China Copper Prices Fall Amid Rising Stocks and Stronger Dollar

China Copper Prices Fall on Rising Inventories and Moderated Demand

China copper prices fall in March as SHFE and LME markets react to higher stock levels. The SHFE April contract fell from 103,920 yuan/t to 95,400 yuan/t by March 18, while LME three-month copper declined to $12,340.50/t. Rising inventories reflect stronger domestic refined output and slower post-Lunar New Year demand recovery.

Chinese refined copper output grew 8–13% year-on-year in January-February, despite tight concentrate availability. Smelters maintained production by accepting lower concentrate treatment and refining charges. Combined SHFE and LME inventories reached 745,283t on March 13, up 56% month-on-month.

Meanwhile, copper imports and downstream restocking weakened. Imports of unwrought and semi-finished copper fell 16% year-on-year to 700,000t, and domestic spot premiums traded at discounts to SHFE. Demand from China’s new energy vehicle (NEV) sector softened following incentive reductions.

Stronger Dollar Adds Pressure to China Copper Prices Fall Trend

The China copper prices fall trend was further supported by a stronger US dollar. The dollar index rose to 100.54 on March 13, adding pressure on international commodity prices. Market participants also cited geopolitical tensions in the Middle East, which pushed Brent crude to $109.65/bl.

US Federal Reserve policymakers held rates steady on March 18 due to uncertainty in the Middle East, but anticipate a quarter-point cut later. Rising oil prices and geopolitical risks heighten medium-term supply-side concerns. African copper belt output may face disruption if tensions escalate.

Looking ahead, trial operations at new refineries, including Liangshan Copper’s 125,000 t/yr facility, could increase supply. However, moderate NEV demand and limited restocking interest continue to weigh on China copper prices fall, suggesting cautious market sentiment.

SuperMetalPrice Commentary:

The China copper prices fall episode reflects a classic mix of supply growth, moderated domestic demand, and macroeconomic headwinds. While short-term pressures dominate, medium-term risks from Middle East conflicts and African copper supply disruptions could support prices. Traders should monitor NEV recovery, refinery expansions, and geopolitical developments closely.