Copper prices dropped by 0.83% to 720.95 following data revealing the sluggishness of China’s post-pandemic economic rebound. The decline was driven by a reduction in new bank loans and concerns over the health of the property sector, impacting copper demand and market sentiment.
China’s Economic Indicators: In July, China’s new bank loans plummeted, leading to a slowdown in annual growth of outstanding total social financing (TSF) to 8.9%.
TSF significantly decreased from 4.22 trillion yuan in June to 528.2 billion yuan, missing estimates. Worries about the property sector’s stability intensified, including possible debt restructuring by Country Garden.
Copper Inventories and Production: Copper inventories in Shanghai Futures Exchange-monitored warehouses rose by 1.5% in a week. LME-registered warehouses also observed rising copper stocks since June 19.
Additionally, copper production in Peru surged by 21.8% in June compared to the same month the previous year, contributing to a 17.6% year-to-date output increase.
Regional Dynamics: While some deliverables in east China were sought-after, overall transaction sentiment remain weak. In contrast, inventories in south China experienced a three-day consecutive decline due to limited arriving shipments.
Outlook and Impact: The slowdown in China’s post-pandemic recovery, coupled with property sector concerns, has put pressure on copper prices.
Increased production and rising stocks also contribute to market uncertainties. As demand and supply dynamics fluctuate, copper’s future performance remains uncertain.