London copper prices are inching closer to the significant milestone of $10,000 per metric ton, primarily due to China’s recent economic stimulus initiatives. The three-month copper contract on the London Metal Exchange (LME) experienced a 0.4% increase, reaching $9,985.50 per ton. This gain comes at a time of relatively low trading activity since Chinese markets are currently closed for holidays. Traders are anxiously awaiting the reopening of these markets to gauge upcoming demand. Besides copper, prices for other metals like aluminium, zinc, lead, and tin also increased, while nickel slipped by 0.8%, settling at $17,840. At the LME Week in London, there has been a noticeable difference in sentiment—optimism among Chinese participants contrasts sharply with more bearish perspectives from Western traders. This sentiment suggests potential for further price gains as Chinese markets reopen and more detailed stimulus measures are revealed by Beijing.
For traders, the ongoing developments in China may signal significant changes in the copper market. The metal has seen an impressive 6.4% gain throughout September, which was its strongest monthly performance since April, mainly driven by expectations surrounding Chinese economic support. The optimism expressed by Chinese market players during the LME Week could be an early indicator of lucrative opportunities emerging as trading resumes and fiscal measures continue to roll out.
From a broader perspective, supply and demand dynamics are playing a crucial role. Copper inventories on the LME have dipped slightly compared to last month, although they still remain nearly three times higher than they were in May. The ample supply is highlighted by the discount of $147.09 per ton on the cash copper contract relative to the three-month contract. However, this abundance could prove to be temporary if China significantly increases its consumption. If demand surges amid clearer economic signals from Beijing, stock levels could deplete, pushing prices higher in the coming months.
London-listed company KEFI Gold and Copper plc (LON:KEFI) is an exploration and development company focused on gold and copper deposits in the highly prospective Arabian-Nubian Shield. The Company operates in Ethiopia and Saudi Arabia with projects including Tulu Kapi project, Jibal Qutman EL and Hawiah.
