China Metals Activity Tracker_ Copper & Iron Ore prices at 4-month highs as China activity accelerates. China steel demand last week +20% WoW. China NPC (5 March) could be economic trigger for metal price upside. Mon

Summary of J.P. Morgan's China Metals Activity Tracker (24 February 2025) Industry Overview - Industry: Metals, specifically focusing on copper, iron ore, aluminium, and zinc in China - Key Trends: Recent acceleration in China's metals activity post-Lunar New Year, with significant increases in steel demand and inventory trends indicating tight physical markets Core Insights 1. Copper and Iron Ore Prices: Copper and iron ore prices have reached four-month highs, with copper prices at approximately $9,500 per ton, reflecting a 5% increase over the last two weeks [2][4][18] 2. **Steel Demand Surge**: Steel demand in China increased by 20% week-over-week, with rebar demand soaring by 164% week-over-week, indicating a rebound in construction activity [3][17] 3. **Inventory Levels**: - Copper inventories in China are at their lowest in five years, approximately 300,000 tons, equating to just eight days of consumption [18][27] - Aluminium inventories also remain low, around 845,000 tons, the lowest in over eight years [21][33] - Iron ore inventories at Chinese ports decreased by 2 million tons last week, now tracking at 159.31 million tons, which is only 13 million tons higher year-over-year [5][27] 4. **Market Conditions**: The physical markets for metals are tight, with steel inventories at their lowest levels for this time of year in over five years, indicating strong demand against limited supply [3][17] Price Forecasts - **Future Price Expectations**: J.P. Morgan forecasts copper prices to rise to$ 10,400 per ton by Q4 2025, and aluminium prices to reach approximately $2,763 per ton in 2025 [22][21] - Impact of NPC Meeting: The upcoming National People's Congress (NPC) meeting on March 5 is anticipated to trigger new economic policy support, potentially boosting metals demand and prices in the following weeks [4][20] Additional Observations 1. Iron Ore Supply Disruptions: Severe cyclone-related disruptions in Western Australia have led to a 39% week-over-week decline in Australian iron ore shipments [5] 2. Global Shipment Trends: Global iron ore shipments fell by 28% week-over-week and are down 45% year-over-year, indicating significant supply chain challenges [5][8] 3. Steel Production Rates: China's steel production is running at an annualized rate of 989 million tons, the fastest start to a year since 2021, reflecting strong recovery in the sector [5][14] Conclusion - The current trends in China's metals market indicate a robust recovery in demand, particularly in steel and copper, driven by post-Lunar New Year activity and anticipated fiscal stimulus. However, supply chain disruptions and low inventory levels suggest potential volatility in prices moving forward.