The dispute over mineral royalty fees in the TFM mining industry and the tight export scheduling at the Durban port in South Africa have resulted in some copper not yet entering the trade chain, forming a hidden inventory.
Although this dispute was resolved on April 29th of this year, due to severe land transportation congestion in Africa, it is expected that transportation from mines to ports will take at least 1.5 months, while shipping from Durban, South Africa to Shanghai port usually takes about 21 days.
According to calculations, the magnitude of Luo Mo non copper needs to be at least in mid August before it can have an impact on domestic inventory.
In addition, the copper and cancelled warehouse receipts of the sanctioned Russian Ural Mining Company have passively become part of the hidden inventory due to their entry into circulation after delivery.
The United States imposed metal and mining revenue sanctions on Ural Mining on July 21st. Ural Mining accounts for approximately 40% of copper production in Russia, which is equivalent to Norilsk Nickel's production.
When LME copper registered warehouse receipts significantly decreased in May this year, the proportion of available inventory in Russia increased from 33% to 66%. According to SMM data, at the end of July, after the delivery of long orders of Russian copper trade held by domestic enterprises, this part of inventory entered the logistics link from the warehouse, and the arrival volume was inevitable.
As the above-mentioned inventory of over 200000 tons gradually becomes apparent, the support of low global inventory levels on prices will weaken.
Taking into account macroeconomic pressure and the risk of fundamental inventory shocks, the current price level lacks a strong driving force for copper prices to rebound again, and may maintain a downward trend in the short term. In the next two months, the copper price center will be around 68000 yuan/ton.