Copper prices were relatively strong in October

1. Trend Analysis

According to monitoring data from Business Society, copper prices fluctuated upward in October. At the beginning of the month, the price was 83,143.33 yuan per ton, and by the end of the month, it rose to 88,095 yuan per ton, marking an overall increase of 5.96% and a year-on-year growth of 15.1%.
According to the spot-futures chart from Business Society, the copper spot price in October initially exceeded the futures price, then fell below it, and finally surpassed the futures price again by month-end. The main contract reflects the expected price two months ahead, indicating a volatile outlook for copper’s future price.
According to LME inventory data, LME copper stockpiles saw a slight decline in October. By the end of the month, LME copper inventory stood at 135,975 tons, down 4.1% from the beginning of the month.
Macro Perspective: In September, the CPI rose by 3% year-on-year, slightly below expectations. The probability of the Federal Reserve cutting rates by 25 basis points is as high as 96.7%, with over 94% chance of another 50-basis-point cut in December. The low-interest-rate environment reduces corporate financing costs and stimulates copper demand. The approval of China’s 15th Five-Year Plan adds further positive momentum, as profits of nationally listed industrial enterprises grew by 3.2% from January to September. Market confidence in the growth prospects of the world’s top copper consumer is robust. The U.S.-China trade talks in Kuala Lumpur reached a “preliminary consensus,” leading to a significant rebound in market risk appetite.
Supply side: The Grasberg mine in Indonesia continues to shut down (the world’s second-largest copper mine), and production in Antofagasta, Chile, may only reach the lower end of the 660,000 to 700,000-ton range by 2025. The ICSG has revised its forecast for copper supply growth in 2025 downward from 2.3% to 1.4%, while Citigroup and UBS predict minimal supply increases this year. The contraction in supply directly drives up costs.
Downstream sector: Demand-side divergence, characterized by “weak traditional and strong emerging sectors”: Emerging industries such as new energy vehicles and photovoltaics maintain stable growth, while traditional consumption sectors (e.g., real estate, building materials, infrastructure) show sluggish growth. High copper prices dampen spot demand, leading to a cautious outlook among downstream procurement enterprises.
According to the annual price comparison chart from Business Society, over the past five years, copper prices in November have mostly declined more than risen, with the first half of the month showing strength and the second half experiencing a drop.
In summary, the improvement in macroeconomic margins and cost-side disturbances provide dual support, suggesting that copper prices may continue to show a strong upward trend in the short term. However, attention should be paid to the early arrival of the end of the month and the off-season, as well as the dampening effect of high copper prices on downstream demand. It is expected that copper prices will primarily fluctuate within a wide range in November.