LONDON: Copper prices climbed to one-week highs on Monday as interest rate cuts in China raised hopes of stronger demand in the top consumer amid persistent worries about the country’s ailing property sector.
Benchmark copper on the London Metal Exchange (LME) traded up 0.9% at $9,715 a metric ton in official rings. Prices of the metal used in power and construction earlier touched a session peak at $9,758.
China’s rate cuts were anticipated, but the 25-basis-point cut was larger than the consensus and follows reductions to other policy rates last month as part of a package of stimulus measures to revive the economy.
“Copper starts the week on the front foot buoyed by a larger-than-expected cut in lending rates,” a metals trader said, adding that the 21-day moving average around $9,780 could limit gains.
China’s economy grew at the slowest pace since early 2023 in the third quarter due to weak domestic demand, slowing export growth and a struggling property sector, which accounts for significant amounts of industrial metals demand.
Copper rises as China rolls out support for stock market
Markets are waiting for a clearer road map to put China’s economy back on a solid longer-term footing, but some analysts said its measures are about stabilising rather than stimulating the economy.
“The property market is still facing structural challenges, first and foremost a shrinking population and slowing urbanisation,” said Julius Baer analyst Carsten Menke.
“The government appears to be well aware of these challenges and thus refrains from pushing the market with ‘old school’ stimulus measures. This is not least because of a more than sufficient stock of finished and unfinished property.”
Elsewhere, aluminium hit $2,656.50 a ton, its highest in more than a week, as feedstock alumina on the Shanghai Futures Exchange continued its upward journey on concerns about disruptions to supplies.
It traded 0.2% higher at $2,617 in official rings.
Zinc advanced 0.8% to $3,113 a ton, lead was little changed at $2,074, tin added 0.9% at $31,590 and nickel rose 0.6% to $17,000.