Copper prices closed the week on a bullish note, buoyed by optimism about rising demand in top metals consumer China, while a drop in the dollar index lent support to the value of the red metal.
Three-month copper on the London Metal Exchange (LME) advanced 2.1 percent to $7,971 a tonne. The LME copper contract also rose 4.5 percent in the week, the most since the week ended July 29.
Meanwhile, the most-traded October copper contract on the Shanghai Futures Exchange (ShFE) was up 3.5 percent to 63,070 yuan or $9,106.00 a tonne.
Market data showed that prices of copper and other industrial metals were boosted by a pullback in the dollar index, making commodities priced in the US currency cheaper for buyers using other currencies.
Copper prices were also seen to have been supported by tight supply of immediately available metal, with the premium of LME cash copper over the three-month contract ending at $108.50 a tonne on Thursday, its highest since November 2021.
He Tianyu, analyst at business intelligence company CRU, explained that copper demand in China has improved since last month, adding that consumption of the metal is expected to be stronger in the fourth quarter of the year.
In addition, ShFE trading volume recorded a robust figure as market participants rushed in orders ahead of the exchange closure for a Chinese public holiday on Monday.
Prices of other base metals also traded higher as aluminium gained 1.4 percent to $2,299 a tonne, zinc jumped 2.4 percent to $3,201.50 a tonne, nickel advanced 4.2 percent to $22,665 a tonne, lead added 1.3 percent to $1,906 a tonne, and tin climbed 0.7 percent to $21,500 a tonne.
On the flipside, data showed that despite the recent increase in demand, China’s consumer prices rose at a slower-than-expected pace while producer inflation hit an 18-month low, leaving room for further central bank policy easing.
Robert Montefusco at broker Sucden Financial observed some weaker data coming out of China amid various shutdowns in the country.
Developing state electricity markets: Lessons from the National Grid (5) Regulatory uncertainty, political risk, and investor confidence challenge