China copper demand rebounds as prices pull back, while iron ore port inventories rise to a record high of around 180Mt

Overview

This report is J.P. Morgan's weekly tracker of China metals activity, with the core objective of identifying inflection points in consumption trends through China metals inventories, port inventories, spot premiums, and seasonal changes. It focuses on copper, aluminum, zinc, iron ore, and steel-related indicators, highlighting the divergence between macro price moves and micro inventory behavior.

Core views

The most important conclusion is that China copper demand is showing signs of recovery: copper prices have fallen by about 5% since the end of February 2026, and Chinese buyers appear to be restocking on the price pullback, driving strong destocking for four consecutive weeks. By contrast, aluminum and zinc restocking continues, and aluminum inventory levels remain clearly elevated, indicating that China aluminum consumption signals are still weak. In iron ore, port inventories have continued rising to a record high of around 180Mt, more a reflection of steel mills' just-in-time, low-working-capital inventory management in the context of more stable overseas shipments.

Analysis framework

The report uses a high-frequency inventory-channel check approach, combining visible China metals inventories, port inventories, seasonal inventory paths, price changes, and spot premiums to judge whether downstream consumption is improving or weakening. Copper destocking, the rise in the Yangshan copper premium, and low inventory levels are treated as signs of improving demand; aluminum's counter-seasonal inventory build is treated as a sign of weaker consumption; and iron ore port inventories at elevated levels are interpreted alongside shipments and steel mill inventory management.

Methodology notes

• High-frequency data trackingChina metals inventory channel check

  Use inventory destocking or restocking to identify downstream demand inflection points

  When inventories are rapidly drawn down, it usually suggests improving downstream consumption or stronger restocking demand; when inventories rise counter-seasonally, it usually indicates weaker demand or a pause in procurement. The report interprets these inventory changes together with seasonal historical ranges, price trends, and spot premiums.

• Seasonal comparisonPost-Chinese New Year weekly inventory change comparison

  Compare inventory changes in the Nth week after Chinese New Year with historical years

  The report compares 2026 post-Chinese New Year weekly copper inventory changes with the same period over the past five years to assess whether the current destocking intensity is unusual. Over the past four weeks, China copper inventories fell by about 180kt, versus an aggregate increase of about 10kt in the same period in the previous five years.

• Commodity price scenarioPrice pullback buy-the-dip behavior identification

  buy the dip

  The report combines the roughly 5% decline in copper prices since the end of February 2026 with the sharp destocking of China copper inventories to interpret this as opportunistic buying by Chinese buyers on the price pullback.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Copper

  Strongest signal of a demand rebound

  Strengths

  Four consecutive weeks of destocking, about 180kt of destocking over the past four weeks, inventories at the low end of the past six years for the same period, and the Yangshan copper premium rising to USD 73/ton.

  Weaknesses

  The report attributes part of the demand improvement to opportunistic buying after the price pullback, so persistence still needs to be confirmed by subsequent inventory and premium data.

  Comparison

  Compared with a cumulative inventory increase of about 10kt in the same period over the past five years, 2026 copper destocking is clearly and unusually strong.

  Risks

  If buying fades after copper prices rebound, the current destocking may prove to be short-term replenishment rather than a sustained improvement in end-demand.

• Aluminum

  Prices remain strong, but China demand signals are weak

  Strengths

  J.P. Morgan Commodities Research continues to maintain a bullish view on aluminum on the back of LME supply constraints.

  Weaknesses

  China aluminum inventories rose by 35kt last week, and total inventories are about 1.4Mt, clearly above the normal seasonal range.

  Comparison

  Copper is destocking while aluminum is restocking, showing a clear divergence within China's metals consumption.

  Risks

  If China inventories keep building, this may weaken the signaling value of the aluminum price rally for demand improvement; at the same time, China's 45Mt aluminum capacity cap is unlikely to be relaxed.

• Zinc

  Weak inventory signal

  Strengths

  The report only notes continued restocking in zinc and provides no more detailed positive data.

  Weaknesses

  Restocking is treated by the report as a negative proxy for Chinese metals consumption.

  Comparison

  Unlike copper's continued destocking, zinc and aluminum remain in restocking mode.

  Risks

  If restocking continues, it may indicate that downstream demand recovery remains insufficient.

• Iron ore and steel

  High inventories reflect low working-capital management at steel mills and improved shipments

  Strengths

  Port capacity remains ample; Mysteel estimates the 47 ports' total capacity at about 265Mt, leaving room for inventories to rise toward about 200Mt.

  Weaknesses

  Port inventories at about 180Mt are record highs and are up 26% year to date, which may weigh on near-term restocking demand.

  Comparison

  Current inventories are 19Mt above the prior peak of about 161Mt in 2023/24.

  Risks

  If steel mills continue to manage inventories on a just-in-time basis, high port inventories may persist and affect iron ore prices and the restocking pace for steel raw materials.

Key data

• China visible copper inventories, latest weekly change-36ktFor the week ended 10 Apr 2026, China's visible copper inventories measured as SHFE plus bonded-zone inventories continued to destock.
• China copper inventories, cumulative change over the past 4 weeksabout -180ktThis stands in sharp contrast to the roughly +10kt cumulative increase in the same period over the past five years.
• Total refined copper inventories in Chinaabout 320ktThis is the lowest level for the same period in the past six years.
• Yangshan copper premiumUSD 73/tonAs of Friday's close, this was the highest level since June 2025.
• China aluminum inventories, latest weekly change+35ktThe normal seasonal pattern would typically call for destocking, so this change is a negative signal for demand.
• Total aluminum inventories in Chinaabout 1.4MtThis is significantly above the historical seasonal range and the highest absolute tonnage in the past six years.
• LME aluminum priceabout USD 3,500/tonUp about 15% year to date and about 10% since the start of the Iran conflict.
• Copper price changeabout -5% since late February 2026The report links this to opportunistic copper buying in China.
• China iron ore port inventoriesabout 180MtMysteel basis; up 26% year to date and 19Mt above the prior peak of about 161Mt in 2023/24.
• Estimated total storage capacity at 47 Chinese portsabout 265MtMysteel believes port capacity has not yet approached full utilization, and iron ore inventories still have room to rise toward about 200Mt.

Impact & implications

For commodity markets, the continued destocking in copper and the rise in the Yangshan premium strengthen the micro evidence of a recovery in China demand, which may provide support below copper prices; however, elevated aluminum inventories show that the price rise in aluminum has not translated into a corresponding improvement in China demand, highlighting a divergence between demand and supply constraints. The record-high iron ore inventories suggest that inventory management in the steel value chain and improved overseas shipments may be suppressing near-term restocking demand, but port capacity remains ample, so further inventory increases do not necessarily imply a logistics bottleneck.

Risks

• The rebound in copper demand may mainly reflect temporary buying after the price pullback rather than a sustained improvement in end demand.
• Aluminum and zinc inventories continue to increase, indicating that the recovery in China's metals consumption is uneven.
• Aluminum prices are supported by LME supply constraints, but elevated China inventories may lead to regional price spreads and shifts in inventory flows.
• Continued gains in iron ore port inventories may weigh on market expectations for demand across the steel value chain.
• The report relies on high-frequency inventories and third-party data, so changes in statistical definitions or seasonal benchmarks could affect signal interpretation.

What to watch

• Whether visible China copper inventories continue to destock, especially after the end of the post-Lunar New Year seasonal peak.
• Whether the Yangshan copper premium can remain elevated or move even higher.
• Whether Chinese buyers continue to purchase copper after prices rebound.
• Whether China aluminum inventories turn from the current about 1.4Mt high level into destocking.
• Whether the China-overseas aluminum price spread drives Chinese inventory flows to other parts of Asia.
• Whether iron ore port inventories continue rising toward about 200Mt, and whether steel mills maintain a just-in-time low-working-capital inventory strategy.
• Subsequent changes in Mysteel shipment, port inventory, and Chinese steel output data.