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Copper prices rise as Chinese buyers return

The copper price rose on Thursday, as Chinese buyers returned to market after a recent selloff. Demand prospects also improved and the market shrugged off the?US rate hike.

Benchmark 'copper' on the London Metal Exchange traded 1.2% higher at $14,408 per metric ton. Prices for the metal used in construction and power industries have fallen 4% since September 10, when they reached a record high price of $14,875 per ton.

The dollar increased after the US Federal Reserve raised interest rates and reaffirmed their commitment to curbing inflation.

The demand for industrial metals has been impacted by the rising dollar, which makes metals priced in dollars more expensive to holders of other currencies.

Alastair Munro is a senior base metals analyst at Marex. He said that?Chinese purchasers are back, though the volumes aren't "massive". He said that Chinese demand is not just speculative, but real buying.

The Yangshan Copper Premium, a measure of Chinese demand for imports of copper, rose to $118 per ton on Tuesday, its highest level since October 2022.

The higher premiums paid on the domestic physical market over the prices on the Shanghai Futures Exchange are also indicative of this. On Wednesday, the premiums reached 645 yuan per ton, their highest level since December 2023.

ShFE monitors Chinese warehouse stocks, which are at 54,780 tonnes, the lowest level since January 2024. This is partly because traders and producers have been shipping metals to the United States in anticipation of tariffs.

Stocks in LME warehouses are also down because of the flow of copper into?the US since President Donald Trump's first mentions about a tax on imports back in February.

Other reports of an industrial accident at the Onsan smelter of?Korea Zinc raised concerns over supply.

Aluminium, lead, tin, and nickel all saw increases of 1.2% or more.

(source: Reuters)