Global Metal Inventories Rise + Light Trading, Copper Prices Decline

Due to rising copper inventories dampening market sentiment, and most Asian traders being away from the market during the Lunar New Year holiday, copper prices (HG=F) declined.

London copper futures once fell by 1.2%, dropping below $12,800 per ton. Global inventories tracked by the London Metal Exchange (LME) have increased for 11 consecutive days, reaching the highest level since March.

Copper prices near historical highs have already suppressed industrial copper demand in China, the world's largest consumer. In anticipation of increased US tariffs, a large amount of metal was shipped to the United States, but now exchange inventories have started to rebound and reserves are gradually being rebuilt.

On Tuesday, copper inventories in LME-tracked warehouses rose by 4.6% to 221,625 tons, pushing total inventories across the three major exchanges in Shanghai, London, and New York to over one million tons. LME lead inventories also surged on Tuesday, while nickel inventories hit a new high since 2018.

The LMEX Index, which tracks six major industrial metals in London, reached a record high last month, driven by Chinese buying and a weaker US dollar. The index has since retreated, and traders are waiting for new catalysts, including further details on US import tariffs and the outlook for Federal Reserve monetary policy.

Global mining giant BHP said on Tuesday that, supported by years of continuous expansion in copper production, its first-half profit surged by more than one-fifth, offsetting the weakness in iron ore and steelmaking coal businesses aimed at China. Currently, copper accounts for more than half of the company's profits.

Editor: Guo Mingyu