Copper Price Fluctuations: A Macro View from Inventory and Tariff Factors

Event: July 31, 2025, BEA released the US industry inventory and sales data for May 2025. The total value of US inventories was up 2.62% year-over-year, down from 3.15%. Total sales were up 3.30% year-over-year, down from 3.68%

The data shows that the US has further confirmed its entry into a proactive destocking phase. The time period for this was from November 2024 to March 2025, with imports returning to normal levels in April-May 2025. However, according to the US PMI import estimate, there may still be temporary inventory replenishment needs from June-July 2025, after which it will continue to destock proactively, with a high probability of exceeding expectations by November.

Additionally, the recent rapid decline in copper prices is attributed to Trump's decision to impose a 50% tariff on copper products and derivatives while exempting raw materials. This has resulted in US imports being unable to lock in original prices including tariffs over the past month.

Overall Inventory Cycle: There may still be temporary inventory replenishment needs from June-July 2025, after which it will continue to destock proactively

The total value of US inventories was up 2.62% year-over-year, down from 3.15%. Total sales were up 3.30% year-over-year, down from 3.68%. The data shows that the US has further confirmed its entry into a proactive destocking phase.

US Industry Inventory Cycle: Half of the industries may enter a proactive destocking phase

Fifteen major industries were surveyed, with six industries entering a proactive destocking phase. These included upstream petroleum, natural gas, and consumer fuels; chemical products; midstream transportation; downstream automotive and auto parts; textiles, clothing, and luxury goods; and food, beverages, and tobacco.

Upstream: Petroleum and chemicals may enter a proactive destocking phase, with building materials and metals having high inventory levels and likely to switch to proactive destocking

1) Petroleum, Natural Gas, and Consumer Fuels: July 2023 - May 2025 was a period of proactive replenishment, entering a proactive destocking phase in June 2024, and remaining so as of May 2025.

2) Chemical Products: August 2024 - March 2025 was a period of passive replenishment, with the possibility of entering a proactive destocking phase in May 2025.

3) Building Materials: February-September 2024 was a period of proactive replenishment, entering a passive replenishment phase in October 2024, and remaining so as of May 2025.

4) Metals and Mining: February 2024 entered a passive replenishment phase, and remained so as of May 2025.

Midstream: Transportation may enter a proactive destocking phase, with paper products and forestry products, electric appliances, components, and mechanical manufacturing entering passive replenishment phases

1) Paper Products and Forestry Products: December 2023 - January 2025 was a period of proactive replenishment, entering a passive replenishment phase in February 2025, and remaining so as of May 2025.

2) Electric Appliances, Components, and Mechanical Manufacturing: July-November 2024 was a period of proactive replenishment, entering a passive replenishment phase in December 2024, and remaining so as of May 2025.

3) Transportation: June 2024 entered a passive replenishment phase, with the possibility of entering a proactive replenishment phase in April-May 2025.

Downstream: Three industries remain in passive replenishment, and three industries may enter a proactive destocking phase

1) Automotive and Auto Parts: April-November 2024 was a period of passive replenishment, entering a proactive destocking phase in December 2024, and remaining so as of May 2025.

2) Home Appliances: August 2024 or entered a passive replenishment phase, and remained so as of May 2025.

3) Textiles, Clothing, and Luxury Goods: July 2024 entered a passive replenishment phase, with the possibility of entering a proactive replenishment phase in April-May 2025.

4) Food, Beverages, and Tobacco: July 2024 entered a passive replenishment phase, with the possibility of entering a proactive replenishment phase in April-May 2025.

5) Daily Consumption Products Wholesale and Retail: July 2024 entered a passive replenishment phase, and remained so as of May 2025.

6) Technology Hardware and Equipment: April 2024 entered a passive replenishment phase, and remained so as of May 2025.

This article is republished from the WeChat public account "Recruitment Macro Thinking", edited by Yan Wencai of Zhishang Financial.