Copper-related stocks continued their downward trend. At the time of writing, CMOC (03993) fell 6.82% to HK$19.96. JIANGXI COPPER (00358) dropped 6.25% to HK$38.38. CHINFMINING (01258) declined 6.08% to HK$12.36. MMG (01208) was down 5.67% to HK$8.48. ZIJIN MINING (02899) decreased 5.43% to HK$37.94.

Citi recently emphasized that copper prices face significant downside risks while conflict in Iran persists. The bank noted a real possibility exists for copper to fall below $12,000 per tonne in the coming weeks. Ongoing disruptions to energy infrastructure and shipping in the Gulf region, combined with a market reassessment of Federal Reserve rate cut expectations and weaker cyclical growth prospects, could trigger further unwinding of copper positions.

Citi's view is that base metals have limited exposure to the persistent conflict. Concerns over energy supply shocks are likely to prompt markets to revise their interest rate cut expectations, influenced by inflationary pressures and a strengthening US dollar.

Huayuan Securities pointed out a substantial accumulation in copper inventories last week. LME copper stocks reached 284,000 tonnes, COMEX stocks were 598,000 short tons, and SHFE stocks stood at 425,000 tonnes, representing weekly changes of +12.07%, -0.60%, and +8.59%, respectively. Social inventories of domestic electrolytic copper totaled 577,000 tonnes, up 8.56% week-on-week.

The securities firm believes that the continued weekly buildup in copper inventories, alongside potential recessionary expectations stemming from the Iran conflict, is capping the upside for copper prices. It anticipates copper prices will experience weak fluctuations in the short term, with attention focused on post-holiday resumption of downstream operations and potential inventory drawdowns during the traditional "Golden March, Silver April" peak demand season.