Copper prices in London took a dip on Friday, but the overall performance for the week painted a much brighter picture, marking the best weekly gain in over four months. This improvement came after officials in China, the world’s largest consumer of metals, pledged economic stimulus measures to support the country’s growth.
As of early Friday morning (0546 GMT), the price of three-month copper on the London Metal Exchange had fallen by 0.7%, sitting at $10,008 per metric ton. However, over the course of the week, this same contract saw a 5.7% rise, marking its largest gain since mid-May.
Meanwhile, in China, the most actively traded copper contract for November on the Shanghai Futures Exchange saw a 1.7% increase, reaching 78,700 yuan ($11,219.62) per ton. This movement set the stage for a third consecutive weekly increase in the copper market.
The recent surge in copper prices on the London Metal Exchange, pushing beyond the $10,000 mark, was largely attributed to the momentum generated by the Chinese government’s stimulus news. Yet, some traders voiced caution, noting that the continuation of this price rally would depend on sustained high trading volumes going forward.
Earlier in the week, Beijing had lowered interest rates and injected liquidity into the banking sector. There was also speculation that the Chinese government might issue special sovereign bonds exceeding $280 billion, all part of broader efforts to reinvigorate economic growth. More fiscal measures are anticipated in the near future, further bolstering confidence in the metals market.
Despite these supportive measures, China’s economic challenges remain significant. August data revealed a sharp contraction in industrial profits, marking the steepest decline so far this year, driven largely by a lack of demand. This highlights ongoing difficulties within China’s industrial sector and economy.
In other metals, the London Metal Exchange saw a variety of movements. Aluminium rose by 1% to $2,638 per ton, and nickel inched up by 0.1%, settling at $16,765. On the other hand, zinc experienced a 0.7% decline, reaching $3,078 per ton, while lead slipped 0.5% to $2,126, and tin fell by 1% to $32,120.
Over in China, trading on the Shanghai Futures Exchange showed mixed results as well. Aluminium posted a 1.5% increase to 20,390 yuan per ton, zinc climbed by 1.7% to 24,940 yuan, and lead advanced by 1.5% to 16,915 yuan. Nickel saw a slight gain of 0.1%, settling at 128,530 yuan, whereas tin experienced a small dip of 0.2% to 255,600 yuan.
Despite the day-to-day fluctuations, copper and other metals ended the week on a stronger footing, largely buoyed by China’s renewed economic stimulus.
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.
