Copper Demand Signals in China Are Improving, While Iron Ore Port Inventories in China Have Reached a Record High

Overview

The latest "China Metals Activity Tracking" focuses on Chinese metals inventories and the steel chain for the week ending April 10, 2026, using high-frequency inventory changes across copper, aluminium, zinc, iron ore, and steel to spot a demand inflection point in China. The core conclusion is that China copper inventories have seen a continuous large drawdown, and combined with rising Yangshan copper premiums, this indicates improving copper demand, interpreted as China "buying the dip" after the global copper price pullback; aluminium and zinc inventories, however, continue to build, remaining negative proxy indicators for weaker metals consumption in China. On iron ore, port inventories rose to a record high, which is interpreted more as steel mills shifting to low working-capital, just-in-time inventory management amid higher and more reliable overseas shipments.

Core views

The most important takeaway is the divergence in demand signals between copper and aluminium. On copper, Chinese inventories fell about 180,000 tonnes over the past four weeks, whereas the same period in previous years typically added about 10,000 tonnes; total refined copper inventories in China fell to about 320,000 tonnes, and Yangshan copper premium rose to $73 per tonne, all supporting a recovery in copper consumption. On aluminium, inventories rose to about 1.4 million tonnes, with prices around $3,500 per tonne and up about 15% year to date, and high prices may be suppressing domestic purchasing; although JPM Commodities Research remains bullish on aluminium due to LME supply constraints, the demand signal in China itself is weak. On iron ore, port inventories are near 180 million tonnes, around 19 million tonnes above the prior peak of about 161 million tonnes in 2023/24, and Mysteel suggests port capacity is still not close to being full, with total 47-port capacity at about 265 million tonnes, meaning inventories could still rise by roughly another 20 million tonnes toward 200 million tonnes.

Analysis framework

The report uses a high-frequency inventory tracking framework, comparing Chinese visible copper inventories, aluminium inventories, iron ore port inventories, steel furnace utilization, steel output, apparent steel consumption, and steel inventories week-over-week, year-over-year, and against historical seasonality. Fast drawdowns are treated as potential signals of improved end-user demand, while inventory buildout is treated as signals of weaker consumption or procurement pauses.

Methodology notes

• High-frequency Data TrackingChinese Metals Inventory Channel Check

  Use inventory drawdown or buildout to identify metals demand inflection points

  The report argues that changes in Chinese metal inventories can provide clues to end-use demand activity: fast drawdowns may indicate improved downstream consumption, while renewed buildouts may indicate weakening demand or slower purchasing.

• Seasonal ComparisonPost-Lunar New Year Weekly Inventory Change Comparison

  Compare the weekly inventory changes in 2026 to the five-year average for the same period

  The copper inventory chart compares post-New Year weekly changes in 2026 against the five-year average, showing copper drawdowns by the week ending April 10 are stronger than normal seasonality.

Asset mapping & comparison

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

• Copper

  Positively aligned with a China demand recovery signal

  Strengths

  Four consecutive weeks of drawdown, about 180,000 tonnes drawn over four weeks, and Yangshan premiums rising to $73 per tonne all indicate improved spot demand.

  Weaknesses

  The report interprets part of the demand as dip buying after a price decline; if copper prices rebound or procurement pacing slows, the strength of drawdowns could weaken.

  Comparison

  Unlike aluminium and zinc, which show buildouts, copper shows much stronger drawdown during seasonal restart conditions.

  Risks

  Global copper prices, geopolitical conflict, imported arbitrage windows, and the sustainability of actual end-user demand in China could affect the assessment.

• Aluminium

  Price view remains constructive, but China demand signal remains weak

  Strengths

  JPM Commodities Research maintains a bullish aluminium price view because of LME supply constraints.

  Weaknesses

  Chinese aluminium inventories are near 1.4 million tonnes, significantly above the seasonal range, indicating domestic purchasing pause or demand shortfall.

  Comparison

  Aluminium and copper diverge: copper drawdown suggests demand recovery, while aluminium buildout indicates weaker consumption.

  Risks

  If the China-overseas spread widens, inventory outflows from China to other Asian regions could affect regional supply-demand balance; whether China lifts the 45 million tonne output cap is also a potential policy variable.

• Iron Ore

  Rising inventory pressure but interpreted as structural

  Strengths

  Steel furnace utilization remains at 89.7%, and Chinese steel output rose slightly week-over-week.

  Weaknesses

  Chinese port inventories are near 180 million tonnes and at a record high, about 19 million tonnes above the prior peak of around 161 million tonnes in 2023/24.

  Comparison

  Iron ore inventories co-exist with slightly lower year-on-year apparent steel consumption, so inventory movement is more tied to overseas shipments and steelmill inventory management.

  Risks

  If port inventories continue to rise toward about 200 million tonnes, iron ore prices and market sentiment could come under pressure.

• Steel

  Intermediate indicator for iron ore demand and Chinese industrial activity

  Strengths

  Blast furnace utilization at 247 steel mills rose week-over-week, and steel output was up slightly week-over-week.

  Weaknesses

  Weekly apparent steel consumption is down 0.6% year-on-year, rebar apparent consumption down 9.5% year-on-year, and total steel inventory is up 9.2% year-on-year.

  Comparison

  Compared with copper demand signals, steel consumption data are more muted, with rebar tied to construction appearing weak.

  Risks

  Weak property and infrastructure demand, slow inventory reduction, and sustained steelmaker margin pressure could continue to weigh on the steel chain.

Key data

• Past 4-week China Copper Inventory Changearound -180k tonnesIn contrast, the five-year average cumulative change over the same period is around +10k tonnes, indicating unusually strong drawdowns in 2026.
• Chinese Visible Copper Inventory Change for Week Ending April 10, 2026-36k tonnesFourth consecutive week of strong drawdown.
• Total Refined Copper Inventory in Chinaaround 320k tonnesThe lowest level for the same seasonal period over the past six years.
• Yangshan Copper Premium$73 per tonneAt Friday close, the highest level since June 2025.
• China Aluminium Inventoryaround 1.4 million tonnesIncreased by 35k tonnes last week, significantly above the normal seasonal range, and the highest absolute tonne level over the past six years.
• LME Aluminium Pricearound $3,500 per tonneUp around 15% year-to-date and around 10% since the start of the Iran conflict.
• China 47-Port Iron Ore Port Inventory176.93 million tonnesBased on table metrics, as of the week ending April 10, 2026, week-over-week -0.3%, year-on-year +19.3%; the main text says inventories are near 180 million tonnes.
• China 47-Port Iron Ore Arrivals26.95 million tonnesFor the week ending April 10, 2026, week-over-week +2.6%, year-on-year +14.2%.
• Global Iron Ore Shipment31.02 million tonnesFor the week ending April 10, 2026, week-over-week +25.5%, year-on-year +6.2%.
• Blast Furnace Utilization Rate at 247 Steel Mills89.7%Week-over-week +0.8%, year-on-year -0.6%.
• Apparent Weekly Chinese Steel Consumption8.96 million tonnesWeek-over-week -0.3%, year-on-year -0.6%.
• Total Chinese Steel Inventory18.13 million tonnesWeek-over-week -2.0%, year-on-year +9.2%.

Impact & implications

For investment implications, the fast drawdown in copper inventories and stronger Yangshan premiums support the thesis of improving China copper demand and could reinforce market confidence in downside demand support for copper. In aluminium, although supply constraints keep J.P. Morgan Commodities Research bullish on prices, high inventories in China imply short-term consumption demand is not strong, and widening China-overseas aluminium price differentials may push Chinese inventories toward other parts of Asia. Iron ore inventory at high levels does not automatically equate to demand collapse; the report emphasizes this is tied to lower steelmaker working-capital and just-in-time inventory practices, but if inventories continue to approach 200 million tonnes, it could still increase market concern about a looser global iron ore supply-demand balance.

Risks

• Inventory drawdown may reflect temporary dip purchasing rather than sustained end-user demand recovery.
• Inventory buildouts in aluminium and zinc indicate some metals consumption remains weak, which may weaken a broad interpretation of China industrial demand recovery.
• Iron ore port inventories are at record highs, and if they continue to accumulate, they could create price and sentiment pressure.
• Geopolitical conflict, LME supply constraints, spread changes, and Chinese policy constraints could shift metals trade flows and price paths.
• The report is primarily based on high-frequency inventory and market data; some indicators may be distorted by transport, port capacity, trade flows, and seasonal factors.

What to watch

• Whether Chinese visible copper inventories continue to draw down and whether drawdown speed stays stronger than the five-year average.
• Whether Yangshan copper premiums can stay elevated, confirming import copper demand and spot tightness.
• Whether Chinese aluminium inventories turn from around 1.4 million tonnes at high levels into drawdowns.
• Whether the China-overseas aluminium spread continues to widen and push Chinese inventories to other regions in Asia.
• Whether China’s 47-port iron ore inventories continue to rise toward about 200 million tonnes.
• Whether blast furnace utilization, apparent steel consumption, rebar consumption, and steel inventories improve.