Concerns about China's economic strength have consistently impacted various commodity markets over the past few years. In recent months, these concerns have significantly pressured markets such as grains, oil, energy, cotton, and sugar. Copper demand has become a key indicator of China's economic growth due to its use in manufacturing and construction. In June, China's refined copper exports reached a record 158,000 tons, suggesting a slowdown in domestic demand.

The latest data from the Shanghai Futures Exchange (SHFE) shows that copper inventories have decreased by 11,162 tons over the past week, marking the seventh consecutive week of decline and the tenth in the last eleven weeks. Currently, SHFE copper inventories stand at 251,044 tons. Although this is 220,000 tons higher than the total inventory at the end of 2023, it is the lowest level since early March.

SHFE copper inventories typically hit their lowest point in December and then surge at the start of the year, with significant restocking occurring around the Chinese New Year. After this year's holiday, inventories increased by 94,803 tons, the largest post-holiday gain on record. Inventories continued to rise significantly over the next three weeks (by 33,164 tons, 24,740 tons, and 47,168 tons), peaking at 336,964 tons in early June, the highest level in three years.

China's refined copper exports fell to 70,000 tons in July as SHFE copper inventories continued to decline. Over the past two weeks, inventories saw the largest drop of 2024, decreasing by 24,099 tons, followed by the third-largest drop of 11,162 tons. If SHFE copper inventories continue to decline, it could be an early sign of a potential recovery in China's economy.