On 19 February, LME cash prices for copper hit a nine-year peak of US$8,806.50/t. This is the highest level since 1 May 2012 when copper traded at US$8,528/t.

Total visible copper stocks (LME + COMEX + SHFE + Chinese bonded warehouses) amounted to just 560kt at the end of January, noted critical materials supply chain intelligence company Roskill—only 11kt more than the lowest recent stock level of 549kt in December 2019.

That prices should be at such elevated levels during the middle of the Chinese Lunar New Year holidays, when Mainland buyers are absent from the market, raises the spectre of whether commodities are poised for a new super-cycle, driven by the increasing demand for renewable energy to meet global decarbonization targets, Roskill said.

Roskill noted that although Chinese refined metal buying has cooled since an earlier frenzy, several end use subsectors remain busy. Orders of enamelled wire for electric motors, air conditioning tube for appliances, electrodeposited foil for EV batteries, copper and alloy strip for interconnect and motor windings and cables for wind power generating equipment are all outperforming last year’s levels. However, wire rod demand from the wire and cable industry as a whole is said to be tepid.

Trade data on Chinese copper imports in January and February are not due to be released until 8 March. Anecdotal evidence suggests these may well be much lower than expected, Roskill said. Strong ocean swells delayed the loading of concentrate and refined metal shipments onto vessels from Chile and Peru during January, while delays of up to three months are reported in Ningbo port for containerized scrap to be inspected and cleared by customs.

At present, every container is being rigorously checked to ensure it meets the new strict import regulations on copper content implemented since 1 November 2020.

The true direction of prices in 2021 will only be revealed once Chinese traders return and assess their appetite for the metal in March, Roskill said.