Copper Market Analysis: Price Pressure Amid Weak Demand

Shanghai, July 15, 2025 – Spot copper prices are facing increasing pressure as market fundamentals show signs of weakening. According to the SMM morning meeting summary, a decline in new downstream orders and cautious market sentiment are creating a challenging environment, making it difficult for prices to break out in the short term.

Although social inventories have seen a slight decrease, it is not enough to offset the decline on the demand side, especially as companies producing electric cables and related products enter their low consumption season.

Key Influencing Factors

Demand Side: Declining Orders and Cautious Sentiment

The main factor currently pressuring copper prices is the clear weakening of demand. Downstream processing enterprises, particularly wire and cable manufacturers, are reporting a decline in new orders. This is forcing them to lower finished product prices to stimulate sales, creating reverse pressure on raw material prices.

The general sentiment among buyers is to wait for further price drops. They are only purchasing based on essential needs and are reluctant to build up inventory, causing spot market transactions to become sluggish.

Supply Side: Slight Inventory Drop Offers Little Support

Although data shows that social copper inventories decreased over the past week, the decline was not significant and is not strong enough to provide a boost to prices. The volume of imported copper remains stable, ensuring that there is no supply shortage in the market. Therefore, the inventory factor is currently playing a passive support role rather than being a primary driver for price increases.

Trading Dynamics and Price Spreads

In the spot market, the price premium has narrowed significantly, with some regions even shifting to a discount compared to futures contracts. This indicates that sellers are having to lower prices to move their stock. Trading activity is primarily driven by long-term orders, while discretionary spot buying is very limited.

Even when prices on the Shanghai Futures Exchange (SHFE) showed slight signs of recovery, the spot market did not show a corresponding improvement, demonstrating that confidence in a price rally is very weak.

Market Outlook

With unfavorable supply and demand fundamentals, copper prices are expected to remain under pressure in the short term. The market needs a significant boost from the demand side, such as a strong recovery in orders from the power or construction sectors, to reverse the trend.

In the current environment, investors and businesses should continue to closely monitor consumption and inventory data to make appropriate business decisions and mitigate risks from price volatility.