LONDON: Copper prices pulled back from 10-week highs on Wednesday on a stronger dollar and some profit-taking which kicked in after top metals consumer China unveiled support measures for economic growth.

Three-month copper on the London Metal Exchange fell 0.6% to $9,736 per metric ton by 0955 GMT. The metal, used in power and construction, hit $9,913, its highest since July 15, earlier in the session.

China’s central bank lowered the cost of its medium-term loans to banks, a day after it announced plans to lower borrowing costs, inject more funds into the economy, and ease households’ mortgage repayment burden.

“After a knee-jerk reaction to China’s support of the economy, the recognition is sinking in that more needs to be done as problems in the Chinese economy are still there, even though important moves were made to support the property market,” said Dan Smith, head of research at Amalgamated Metal Trading (AMT).

Copper hits two-month high on US rate cut momentum, improving China demand

“At the same time, demand is reasonably good in China at least for copper and aluminium, and the supply side is very tight for both of the metals,” he added.

With the start of the U.S. interest rate easing cycle and China’s stimulus measures, AMT expects prices for copper, aluminium, zinc and tin to rise by the second quarter of 2025. Lead and nickel prices are likely to fall due to weaker fundamentals, it added.

The global nickel market surplus will rise to 170,000 tons in 2024 from 167,000 tons in 2023, according to the International Nickel Study Group. Next year, the INSG expects the surplus at 135,000 tons amid rising stainless steel sector in China and Indonesia, but also slower-than-expected growth of nickel use in batteries for electric vehicles.

LME aluminium dipped 1.2% to $2,524.50 a ton, zinc slid 0.7% to $2,988.50, lead declined 0.8% to $2,068, tin fell 1.4% to $32,115 and nickel lost 0.9% to $16,540.