By: Editorial Team, StoneX Media
Copper markets are becoming influenced more by physical demand than speculative positioning. While semiconductor equities have weakened over recent weeks, China's changing consumption patterns are creating fresh pressure across global copper supply chains. The result is a market where declining inventories and shifting trade flows are becoming more important price drivers than broader investor sentiment. These developments strengthen the case for a tighter physical market for the coming months.
Natalie Scott-Gray, StoneX Senior Metals Analyst, specializes in global base metals markets and the interaction between physical supply chains and macroeconomic developments. Her analysis focuses on how inventory movements, trade policy and industrial demand combine to shape pricing across international metals markets.
China's refined copper demand is tightening global availability as domestic policy shifts change consumption patterns. Natalie Scott-Gray explains that a government crackdown on tax-related practices and "circular invoicing" has reduced copper scrap availability, forcing consumers towards refined cathode. Domestic inventories have declined while the Yangshan import premium has climbed to multi-year highs, encouraging additional imports through the SHFE-LME arbitrage window. This shift is drawing copper away from international exchanges and reinforcing tighter conditions across the global physical market.
Copper inventories are becoming more and more concentrated as both China and the United States compete for available metal. Scott-Gray notes that "LME stocks being drawn from both the west and east" have pushed visible exchange inventories outside the United States to their lowest level since February 2024. As a result, regional shortages are becoming more evident despite relatively comfortable global inventory figures earlier in the year. If seasonal Chinese demand strengthens alongside infrastructure spending, these inventory trends could provide additional support for copper prices during the coming months.
According to Scott-Gray, reduced scrap availability following China's crackdown on circular invoicing has increased demand for refined copper cathode, encouraging additional imports.
Inventories are declining because copper is being drawn simultaneously into both the United States and China, reducing available stocks on global exchanges.
The discussion highlights stronger seasonal Chinese demand, increased infrastructure spending and continued tight inventories as factors that could support copper during the fourth quarter.
Access live prices, supply and demand data, and actionable market commentary focused on the Metals sector. Sign up for StoneX Market Intelligence today and see how our Metals insights can elevate your strategy.
Sign up for a Market Intelligence trial today
--- Written by Frédéric Guetin, StoneX TV Producer
--- Expert: Natalie Scott-Gray, StoneX Senior Metals Analyst
The subsidiaries of StoneX Group Inc. provide financial products and services, including, but not limited to, physical commodities, securities, clearing, global payments, risk management, asset management, foreign exchange, and exchange-traded and over-the-counter derivatives. These financial products and services are offered in accordance with the applicable laws in the jurisdictions in which they are provided and are subject to specific terms, conditions, and restrictions contained in the terms of business applicable to each such offering. Not all products and services are available in all countries. The products and services offered by the StoneX Group of companies involve risk of loss and may not be suitable for all investors. Full Disclaimer. This content is not intended for residents of any particular country, and the information herein is not advice nor a recommendation to trade nor does it constitute an offer or solicitation to buy or sell any financial product or service, by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Please refer to the Regulatory Disclosure section for entity-specific disclosures. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc. The information herein is provided for informational purposes only. This information is provided on an ‘as-is’ basis and may contain statements and opinions of the StoneX Group of companies as well as excerpts and/or information from public sources and third parties and no warranty, whether express or implied, is given as to its completeness or accuracy. Each company within the StoneX Group of companies (on its own behalf and on behalf of its directors, employees and agents) disclaims any and all liability as well as any third-party claim that may arise from the accuracy and/or completeness of the information detailed herein, as well as the use of or reliance on this information by the recipient, any member of its group or any third party.
© 2026 StoneX Group Inc. all rights reserved.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
China's copper market is reshaping global trade flows as policy changes reduce scrap availability and increase demand for refined metal. Combined with falling inventories and stronger import incentives, these developments suggest China is becoming a more important driver of copper prices.
Copper hit a record high on 13th May of $14,153/t, driven by robust forecasts for copper’s future demand in electrification and AI data centers, a focus on unforeseen supply risks (created from the Iran war), concerns over the pull of refined units into the US on Section 232 tariff expectations, alongside wider market appetites to hold strategic hard assets. However, set against a backdrop of historically elevated global stocks, anticipation of a relatively balanced refined market and a globally divergent view from speculators, the justification for record high copper was put into question. In this article we look at the realities in the copper market at present, in which global stocks and stocks ex-US have drawn down to their lowest level in seven months and February 2024 respectively. Are we at the start of copper’s physical market reflecting real world tightness and what does this mean for copper prices?
The base metal index has come under pressure over the last week, with prices facing headwinds from the macroeconomic outlook, including fatigue over the Iran War, a US tech sell off and a pause in direction ahead of the July US FOMC monetary policy meeting. In our view, once the markets have digested the meeting, we will see base metals resume pricing with focus on the fundamentals, in which we are starting to see real world tightness for metals like copper, zinc and tin
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bilateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and track record are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform to “boots-on-the-ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
