Since May 9th, China's copper price for immediate delivery has been higher than that for forward delivery. This price structure may continue due to declining imports.

The manager of an international trading company in Shanghai said that the price inversion indicates that the supply is limited in the near future. China's refined copper imports fell to the lowest level in 10 months in June due to shrinking demand.

The above-mentioned manager said: "Supply has become tight because importers are currently on the sidelines. Given that Chinese copper prices are lower than overseas market prices, importers lose 2-3% for every ton of copper imported."

bare copper wire

Since the beginning of June, China has cut interest rates twice, and since November last year, it has cut bank deposits three times to boost economic growth. China's economic growth slowed in the second quarter to 7.6%, the lowest level in three years. The Shanghai copper August contract closed at 55,080 yuan per ton on Tuesday, and the November contract closed at 54,680 yuan per ton.

According to data from the General Administration of Customs, China imported 250,097 tons of copper in June and 301,990 tons in May. According to data compiled by Bloomberg, copper exports in June fell from 102,375 tons in May to 35,477 tons, the largest drop since 2008.

"The price inversion may continue for a period of time until short-term supply is no longer in short supply."