Copper up on China’s easing monetary policy stance, demand rebound, supply concerns

Copper prices rose on Thursday on China’s central bank’s reinforcement of its easing monetary policy stance, better end-user demand following recent price drops, and supply concerns.

Three-month copper on the London Metal Exchange (LME) was up 0.4% at $9,820 per metric ton by 0542 GMT, while the most-traded July copper contract on the Shanghai Futures Exchange (SHFE) advanced 1.6% to 79,700 yuan ($10,977.96) a ton.

The People’s Bank of China will stick to a supportive monetary policy stance and will resolutely prevent the exchange rate from overshooting, its governor said on Wednesday.

Meanwhile, Anglo American’s copper output at its Los Bronces mine in Chile is expected to fall nearly a third from average historical levels next year, highlighting the tightness in raw material supply.

As copper prices fell in the past week, companies said end-user orders have returned, leading to a drawdown of domestic spot stockpiles, Jinrui Futures said in a note.

Copper prices on the LME fell as low as $9,551 earlier this week from their record highs above $11,000 hit just a month earlier.

SHFE copper inventories eased on Friday to 330,753 tons.

Prices are expected to be supported in the short term on easing measures and the improvement in spot physical copper demand, Jinrui added.

Copper bounces despite inventories jump

However, a jump in LME copper stocks capped gains, and copper is entering a traditionally slow demand season. Chances of fewer US rate cuts than previously expected is also weighing on metal prices.

LME aluminium rose 0.1% to $2,502.50 a ton, nickel edged up 0.3% at $17,425, zinc edged down 0.1% at $2,866.50, lead declined 0.2% to $2,194 while tin climbed 0.7% to $32,600.

SHFE aluminium rose 0.4% to 20,550 yuan a ton, nickel advanced 1.2% to 135,300 yuan, zinc climbed 1% to 23,830 yuan, tin increased 2.3% to 272,870 yuan while lead fell 1.8% to 18,915 yuan.