Copper prices were range-bound on Wednesday as a spike in inventories in Chinese exchange warehouses offset tightness in mining supply.
Three-month copper on the London Metal Exchange was nearly flat at $8,472.50 per metric ton by 0247 GMT, while the most-traded April copper contract on the Shanghai Futures Exchange was largely unchanged at 68,850 yuan ($9,564.09) a ton.
Copper inventories in SHFE warehouses more than doubled in just over two weeks to 181,323 tons on Friday, the highest since March last year, suggesting Chinese demand has not made a strong recovery since the Lunar New Year holiday.
Meanwhile, copper mine disruptions have created tightness in the ore market and pushed processing fees to multi-year lows and hurt copper smelters’ profit, which could lead to an output cut in refined copper in the long term.
LME aluminium rose 0.1% to $2,192.50 a ton, nickel increased 0.1% to $17,475, zinc fell 0.4% to $2,413.50, lead declined 0.5% to $2,079.50 and tin eased 0.2% to $26,300.
SHFE aluminium edged down 0.1% at 18,825 yuan a ton, zinc eased 0.2% to 20,580 yuan, lead declined 0.3% to 15,910 yuan, while nickel rose 1.6% to 135,460 yuan and tin advanced 0.3% to 216,440 yuan.
Aluminium consumption growth in China is likely to drop 1.7% this year, from a 7.6% jump in 2023, as demand from the construction sector is likely to shrink due to the country’s troubled property market.
The cash LME zinc contract was traded at a steep discount to the three-month contract, at $46.70 on Tuesday - the biggest discount since at least 2009 - as inventories surged in LME warehouses.