Around the world, surveys of manufacturing purchasing managers suggest weak demand for industrial metals.
China's Caixin/S&P manufacturing PMI fell to 50.0 in March, down from 51.6 in February. The new export orders sub-index - a gauge of demand - fell to 49.0 after briefly swinging above 50 in February.
A 19% drop in China's March copper imports also suggested deterioration. Subdued physical demand in China can be seen in the copper premiums over benchmark prices. Premiums are down 27% since the start of 2023 at $27.5 a tonne. Copper has been supported by historically low inventories in LME-approved warehouses . At 51,850 tonnes, they are near their lowest since 2005.
But in warehouses monitored by the Shanghai Futures Exchange , the drawdown slowed in April. "While copper rallied when China's government opened the economy in December, upside has subsided as fundamentals on the physical market need to catch up," said Bank of America analyst Michael Widmer. Rising production in Latin America will also boost supplies. Canada's Teck Resources produced the first bulk copper concentrate at its Quebrada Blanca Phase 2 project in Chile.
In Peru, the government expects copper production to increase by 15% in 2023 after recent protests disrupted output. Resolution to a dispute over royalties between China's CMOC and the Democratic Republic of Congo's state-miner Gecamines is likely to bring a resumption to CMOC copper exports, adding to market supply. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Yangshan copper premium LME copper price LME and ShFE copper inventories Global copper market balance ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Polina Devitt Editing by David Goodman)
