Copper inventories across LME warehouses hit 352,150t as of mid-June, up 2.1% week-over-week. The increase comes as Chinese refined copper imports slipped in May, with customs data showing 278,000t imported, down 12% from April. Spot premiums in Shanghai fell to $18/t over LME cash, the narrowest since March.
Global refined copper output continues to run at elevated levels. The International Copper Study Group (ICSG) estimates 2026 refined production at 28.5 million tonnes, up 3.2% year-on-year, driven by new smelting capacity in China and the Democratic Republic of Congo. Mine supply grew 1.8% in Q1, slower than refined output growth of 3.5%.
On the demand side, Chinese downstream activity shows mixed signals. Wire and cable production rose 4.1% year-on-year in May, but property sector copper use remains soft. State Grid procurement for transmission infrastructure is running on schedule, with 120,000t of copper conductor tendered in Q2.
The bull case hinges on mine supply constraints. Concentrate treatment charges (TCs) remain depressed at $8-12/t, signaling tight raw material availability for smelters. A sustained TC below $15/t historically precedes refined output cuts. The bear case: above-ground stocks continue growing, and Chinese exports of semi-fabricated products reached 98,000t in May, the highest since 2023.
Base case for H2 2026: LME copper averages $13,000-13,800/mt, with stock levels the determining variable.
Copper inventories above 350,000t give buyers near-term leverage in spot negotiations. But concentrate TC compression at $8-12/t signals raw material tightness that could constrain refined output in Q4. Fixed-price contracts for Q3 delivery at $13,000-13,200/mt offer protection against a supply-driven rebound. Track LME stocks weekly — a sustained drop below 320,000t would signal the turning point.