Shanghai copper prices hit their highest in nearly four weeks amid a drop in inventory and on hopes that China will announce more economic support measures that will boost metals demand.

The most-traded July copper contract on the Shanghai Futures Exchange climbed as much as 1.3% to 66,870 yuan ($9,405.99) a tonne, the highest level since May 11, before easing to 66,640 yuan a tonne at 0608 GMT, up 1%.

Three-month copper on the London Metal Exchange eased 0.1% to $8,223.50 a tonne, while nickel increased 0.6% to $21,015 a tonne and zinc rose 1.4% to $2,320 a tonne.

China will likely further cut banks’ reserve ratio and interest rates in the second half of this year to support the economy, the China Securities Journal reported, citing policy advisors and economists.

Investors also hoped that Beijing would roll out supportive measures soon to bolster the embattled property sector, which consumes a vast amount of metals. Meanwhile, LME on-warrant copper inventory dropped 19.9% on Friday, the biggest daily slump since October 2022, latest data showed. SHFE copper inventories were at 86,648 tonnes, 66% lower than late February.

Copper prices slip as tepid demand, economic woes linger

“Signs of tight supply re-emerged on the London Metal Exchange… Tax breaks for high-end manufacturing companies are also being planned,” said ANZ analysts in a note, adding that limited economic package to boost consumption of electric vehicles in China also supported prices.

LME lead was up 0.3% at $2,034 a tonne, tin increased 0.2% to $25,605 a tonne, while aluminium fell 0.4% to $2,235.50 a tonne.

SHFE nickel dipped 0.2% to 159,320 yuan a tonne, zinc increased 1.4% to 19,495 yuan a tonne, tin was almost flat at 208,870 yuan a tonne, and aluminium fell 0.7% to 18,150 yuan a tonne.