LME copper stocks rise to two-year high as demand falters

On-warrant copper inventory held by the London Metal Exchange rose on Wednesday by 5.7% to the highest since September 2021, according to bourse data. That’s a sharp turnaround from just three months ago when stocks fell to the lowest in almost two years.

Copper bulls have been disappointed by the metal this year after predicting a rally driven by a revival in Chinese demand, consumption by green technology and tight supply. Instead, prices are close to little changed year-on-year, after giving up earlier gains.

While warehouse inventories are sometimes used to gauge the mismatch between supply and demand, they can be impacted by individual trades and idiosyncratic market strategies. Still, the figures are just the latest signal that the copper market remains well supplied.

Treatment and refining charges by smelters remain high, an indication the raw materials used to make refined copper are relatively plentiful. China — the world’s top copper consumer — has been posting weaker-than-expected economic data that’s also weighed on the metal.

Most of the recent copper inflows have been into European and American warehouses. Gauges of manufacturing, a key source of demand, in both regions indicate the sector has been contracting for several months.

Copper futures added 0.3% to trade at $8,414 a ton on the LME by 5:31 p.m. London time. Other metals were mostly higher, with zinc adding 2% and tin rising 0.6%.