Deutsche Bank: China Copper Inventories Drop to Multi-Year Lows, Physical Market Underpins Copper Prices
nashnova research
Deutsche Bank says China's exchange copper inventories have fallen to a multi-year low, with physical markets outside the U.S. tightening steadily — but tariff policy remains the swing factor for what comes next.
Why are copper prices rising?
The direct driver: markets expect the U.S. may impose tariffs on refined copper, pulling large volumes into America and leaving inventories outside the U.S. extremely tight.
This means → tariffs haven't landed yet, but the mere *expectation* of them is already redistributing physical copper around the globe.
Deutsche Bank's base case: tariff uncertainty persists, ex-U.S. inventories tighten further, and the physical market continues to support higher prices.
What are the bulls and bears each betting on?
Will tariffs push copper up or down?
BULL
Supply already tight
Global mine output has been flat or falling for two straight years; future growth is constrained.
Tariffs amplify tightness
Tariff expectations stack on top of already-tight fundamentals, doubling the upward pressure.
BEAR
If tariffs are dropped
Over 1 million tonnes of U.S. stockpiles could flow back into the global market, reversing the squeeze.
Premium already narrowing
COMEX-to-LME copper premium is down to roughly 1% — the pull into the U.S. is weakening.
In plain terms = tariffs are the on/off switch for this copper rally — impose them and the squeeze deepens, remove them and it reverses. Nobody knows the outcome yet.
What is going wrong at Chilean mines?
Chile's August copper output was 366,000 tonnes — down 8% month-on-month, 13% year-on-year. January-to-August cumulative output fell 8% year-on-year.
The causes: weather disruptions plus declining ore grades at several major mines. Ore grade is the copper concentration in mined rock — lower grades mean less copper per tonne of rock processed.
Antofagasta published its first 2027 output guidance at 630,000–690,000 tonnes; the midpoint is about 3%–4% below consensus. This means → the world's largest copper-producing country has less room to grow supply over the next two years than the market had assumed.
What is the spot market signalling?
On October 9, China's spot treatment charge for copper concentrate — the fee smelters charge to process ore into metal — fell to negative $238 per tonne, a record low. In plain terms = smelters are now *paying* to secure raw material, rather than being paid — a sign of extreme tightness at the ore end.
China's cathode copper premium — the spot price above the benchmark — rose 14% month-on-month to $130 per tonne, up 53% from a month earlier.
This reflects a rapid intensification of tightness in China's physical copper market, consistent with exchange inventories sitting at multi-year lows.
How do short-term swings square with the medium-term trend?
China's copper inventories rose 37% week-on-week last week — a short-term restocking blip.
Deutsche Bank stresses this does not alter the medium-term picture: exchange inventories remain at a multi-year low, and fundamentals stay tight.
Deutsche Bank's top picks in copper: Anglo American, Teck Resources, Freeport-McMoRan, and First Quantum Minerals. This means → the bank is betting that in a supply-constrained environment, companies with high-quality mine assets benefit first.
市场有风险，内容仅供研究参考，不构成投资建议。