Copper Supported as Tight Inventories Offset China Output

Key Moments

Market Reaction to Geopolitical Developments

ING analysts Warren Patterson and Ewa Manthey reported that copper prices moved higher as the market responded to signs of progress in US-Iran negotiations. According to their assessment, the news improved expectations for continuous shipping flows through the Strait of Hormuz and helped alleviate some inflation-related worries.

“LME copper prices edged higher yesterday, supported by reports of progress in US-Iran talks. This bolstered expectations for uninterrupted transit through the Strait of Hormuz and eased inflation concerns.”

Inventory Trends Across Major Exchanges

The analysts highlighted that the fundamental backdrop for copper remained constructive, supported by ongoing declines in visible inventories across key exchanges.

“Market fundamentals also remained supportive, with inventories continuing to decline across exchanges.”

“SHFE stocks fell to the lowest level since December 2025, while LME stocks hit March 2026 lows.”

Chinese Refined Copper Production

The report also pointed to stronger refined copper production in China, based on official data.

“Data from China’s National Bureau of Statistics, meanwhile, showed refined copper output rose 2.2% year-on-year to 1.3mt in May.”

Improved profitability at smelters played a key role in supporting higher operating levels.

“Output was supported by higher sulphuric acid by-product prices, which boosted smelter margins and encouraged stronger operating rates.”

Overall Market Support from Tightening Stocks

Patterson and Manthey underlined that the ongoing drawdown in exchange inventories is providing continued support to the copper market. Despite higher refined production in China, the combination of lower SHFE and LME stocks and improved confidence around transit routes has reinforced the positive tone in prices.