Copper price falls through $10,000 as exchange inventories keep rising

Stockpiles on the Shanghai Futures Exchange have climbed to the highest since 2020, and there has also been a steady stream of smaller inflows into Asian depots tracked by the London Metal Exchange over the past few weeks. Inventories typically decline at this time of year, and the jump has put pressure on prices after copper spiked to a record high above $11,100 last month.

Meanwhile, US job openings fell in April to the lowest level in over three years, consistent with a gradual slowdown in the labor market. Available positions decreased to 8.06 million from a downwardly revised 8.36 million reading in the prior month, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, known as JOLTS, showed Tuesday.

Treasury yields pushed lower after the print, and swap markets now price in a faster pace of rate cuts this year. That helped copper recoup some of the early losses.

Base metals have surged this year on hopes for lower US interest rates and signs that China’s economy may finally be emerging from its post-pandemic slump. Meanwhile, the ongoing rise in exchange inventories offers evidence that buyers are amply supplied for now and serve as a headwind for bulls predicting that prices will soon make another push higher.

“The copper market seems much more sufficiently supplied than some traders had hoped for,” Carsten Menke, head of next-generation research at Julius Baer, said in an emailed note. “Hence a rapid turnaround of copper prices thus looks unlikely in our view and we rather expect the market to consolidate during the summer months.”

Copper fell 1.7% to $9,968.50 a ton on the London Metal Exchange as of 3:26 p.m. local time. The metal racked up a third monthly advance in May after hitting a record during the month. Shares of copper miners also tumbled, with Freeport-McMoRan Inc. down as much as 4.8%.

Other main base metals fell on the LME except aluminum, which edged higher.