China’s recent trade data for July show a steady demand with an increase in imports of unwrought Copper and Copper ores from the previous month. This trend persists despite concerns about potential US tariffs on unprocessed Copper, which were expected to influence trade flows.
US tariffs affecting only a select group of Copper products did not lead to anticipated shifts towards the US market. Waiting for tariff applications might have been beneficial for Chinese importers due to expected price reductions outside the US.
The rise in Copper ore imports is juxtaposed with a decline in treatment and refining charges, suggesting a raw material shortage. These charging declines indicate challenges in the processing segment of the industry, affecting overall availability.
China’s demand for copper remains solid, as shown by the recent rise in July 2025 imports. We see this confirmed by China’s latest industrial production figures for July, which beat expectations. Traders should look past the noise of US tariffs, which so far have not significantly altered trade flows.
The most critical signal is the drop in treatment and refining charges, which have fallen to multi-year lows around $15 per tonne. This points directly to a shortage of copper concentrate available for smelters. A lack of raw material now will likely mean less refined metal available in the future.
We are already seeing this tightness reflected in global warehouse stocks. As of early August 2025, registered copper inventories on the London Metal Exchange have dropped to just 45,000 tonnes, the lowest level we have seen since late 2024. This drawdown of available metal shows that demand is currently outstripping immediate supply.
This scenario is reminiscent of the market conditions we observed back in 2021. During that period, a similar squeeze on concentrate supply and falling exchange inventories preceded a significant rally in copper prices. The current setup suggests history may be repeating itself.
Given these supply-side constraints and steady demand, we believe the market is underpricing the risk of a price spike in the coming weeks. We should consider establishing long positions through futures or buying call options to capitalize on potential upside. This strategy positions us to benefit from the emerging supply squeeze.
