London copper prices rose at the beginning of the week, supported by signs of increasing demand from China, the world’s largest consumer of copper, along with declining inventories. Meanwhile, most other base metals saw a drop, driven by the strengthening U.S. dollar.
By 0157 GMT, copper prices for three-month contracts on the London Metal Exchange had edged up by 0.3%, reaching $9,508.50 per metric ton. However, in contrast, the most-traded October copper contract on the Shanghai Futures Exchange showed a 0.4% decline, trading at 75,430 yuan ($10,707.34) per ton.
Last week, copper prices experienced a significant increase, reaching their highest level in two months. This rise followed the Federal Reserve’s decision to begin a monetary easing cycle with a larger-than-expected half-percentage-point rate cut. A reduction in interest rates generally improves the economic outlook and boosts the demand for industrial metals, including copper.
China’s copper consumption has also seen an uptick, driven by seasonal demand and the lower prices that had previously prevailed. Supporting this trend, copper inventories in the Shanghai Futures Exchange warehouses continued to fall, with deliverable stocks dropping further to 164,938 tons by Friday. These stocks have been reduced by more than half since reaching a multi-year peak in early June. Additionally, the Yangshan copper premium, an indicator of import demand, reached a nine-month high last week, further signalling improved sentiment in the market.
However, the strengthening U.S. dollar weighed on the broader metals market. The dollar reached a two-week high on Friday after the Bank of Japan decided to keep interest rates unchanged and signalled no rush to raise them again. The dollar continued to trade slightly higher during Monday’s Asian trading hours.
In other metals, prices showed mixed movements. On the London Metal Exchange, aluminium dipped by 0.1% to $2,482 per ton, zinc remained flat at $2,875, nickel fell by 0.3% to $16,455, lead dropped by 0.4% to $2,046, and tin saw a decline of 0.6%, trading at $31,945 per ton.
On the Shanghai Futures Exchange, aluminium prices dropped by 1.1% to 19,855 yuan per ton, nickel slipped by 0.6% to 124,880 yuan, zinc fell by 1.5% to 23,800 yuan, lead experienced a sharper drop of 1.9%, trading at 16,325 yuan, and tin was down 0.4%, reaching 258,900 yuan.
Copper’s performance was buoyed by favourable factors such as China’s rising demand and falling inventories, while other base metals struggled under the pressure of a firming U.S. dollar.
Jubilee Metals Group plc (LON:JLP) is a diversified metal recovery business with a world-class portfolio of projects in South Africa and Zambia. The Company’s expanding multi-project portfolio across South Africa and Zambia provides exposure to a broad commodity basket including Platinum Group Metals, chrome, lead, zinc, vanadium, copper and cobalt.
