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
StoneX TV content is created, produced, and distributed solely by StoneX Media Ltd (“StoneX TV”) and is provided for informational and educational purposes only. StoneX TV does not provide investment, financial, legal, or tax advice and does not make any recommendation or endorsement of any investment strategy, transaction, or financial instrument. Nothing in this content constitutes, or should be construed as, investment advice or a recommendation to buy, sell, or hold any financial instrument, including securities, futures, derivatives, digital assets, foreign exchange products, or CFDs. This content does not constitute an offer, invitation, or solicitation to engage in any investment activity. The information presented is general in nature and is not tailored to the financial situation, investment objectives, or risk tolerance of any specific person. You should not rely on this content as a substitute for independent professional advice. Investing and trading in financial instruments involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Any views or opinions expressed are those of the presenter at the time of publication and are subject to change without notice. Such views may not necessarily reflect those of StoneX Media Ltd or its affiliates. StoneX Media Ltd and its affiliates, including StoneX Group Inc., may from time to time have positions in, or engage in transactions involving, the financial instruments referenced. This content may include general market commentary and opinion. It does not constitute independent investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research. StoneX Media Ltd is not authorised or regulated to provide investment services and does not act in a fiduciary capacity. StoneX Media Ltd is incorporated in Ireland and operates in accordance with applicable Irish law. It is a wholly owned subsidiary of StoneX Group Inc. and is a separate legal entity from other subsidiaries within the StoneX Group, which may be regulated in various jurisdictions. StoneX Media Ltd does not act on behalf of, or provide services for, any regulated affiliate. This content is not directed at, and may not be distributed to, any person in any jurisdiction where such distribution would be contrary to local laws or regulations. Supporting documentation for any claims, comparisons, statistics, or technical data may be made available upon reasonable request, where applicable.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
Base metals enter a critical week with increasingly supportive micro-fundamentals being offset by a more challenging macro backdrop. Inventory trends across several metals remain constructive, particularly in zinc, copper and aluminium, but investors face rising uncertainty from US monetary policy, Chinese demand concerns and escalating geopolitical tensions.
Copper has rallied on tight supply and falling inventories, but the largest single variable sitting over the market is a United States tariff decision that has still not been made. More than 1.2 million tonnes of metal moved onshore in anticipation, and that material is not going anywhere while the question stays open.
Copper and zinc prices are both climbing on the same squeeze, falling LME inventories, tight concentrate markets and record backwardation. StoneX Head of Base Metals Trading Giles Plumb and StoneX Base Metals Sales and Trading specialist Calvin D'Andrea join Senior Metals Analyst Natalie Scott-Gray to explain what is moving each metal. Copper sits under unresolved Section 232 tariff policy, more than 1.2 million tonnes of metal drawn onshore in the United States, and speculative money arriving through the artificial intelligence trade. Zinc is a physical story, with spot availability outside China thin and stock slow to move.
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 bi-lateral 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 record of accomplishment 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.
