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Shanghai copper surges as China plans to expand strategic reserves

Shanghai copper rose Wednesday as investors responded to China's plans to increase its strategic reserves.

The most active copper contract at the Shanghai Futures Exchange jumped 3.47% in daytime trading to close at $15,159.29 per metric ton. The benchmark 'three-month' copper on the London Metal Exchange fell 0.1% to $13,464.50 per ton at 0700 GMT. It held on to its Tuesday gains, which were its highest daily percentage gain since April 2022.

Copper's previous session gain was after it joined a two sessions plunge in metals, led by gold and Silver to lose up to 15% from its record established?on Friday at $14,527.50 per ton.

An official from the state-backed China Nonferrous Metals Industry Association announced on Tuesday that China would expand its strategic copper reserves. The association also said it will explore creating a system of commercial stockpiling led by state owned enterprises.

Antaike - a state-funded research institute – has cautioned investors.

In a WeChat post on Wednesday, it stated that "the exploration of a commercial stockpiling system?and the research into the feasibility and availability of copper concentrates are still preliminary ideas being discussed by relevant companies.

Analysts and traders warned against interpreting the announcement in a way that was not accurate. They suggested it could be a longer-term plan rather than an immediate intention to enter the market. The traders and analysts spoke under condition of anonymity due to the sensitive nature of stockpiling.

London tin fell 1.09% to $49,575, despite previously reclaiming $50,000.

Nickel has also increased. Shanghai nickel rose 3.78%, to 137.680 yuan per ton. The?London nickel benchmark contract rose 0.91%, to $17.605. Goldman Sachs & Macquarie both raised their 2026 average nickel price forecasts above $17,000 on Tuesday. They cited tightened supply coming from the top producer, Indonesia.

Aluminium, zinc and lead were all down 0.30%.

On the LME, zinc climbed 0.37% and lead dipped 0.13%.

(source: Reuters)