Copper firms on China demand hopes
Onome Amuge
Copper prices advanced in the week, underpinned by an easing of COVID-19 curbs in China which boosted demand expectations in the world’s top consumer of the metal.
Three-month copper on the London Metal Exchange (LME) was up 0.6 per cent to $8,592 a tonne. The market also reached its highest since Nov. 14 at $8,598 earlier in the session.
The most-traded copper contract on the Shanghai Futures Exchange (SHFE) also traded in a bullish direction as it added 1.2 per cent to 66,830 yuan or $9,604.08 a tonne.
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nalysts at Australian and New Zealand banking group ANZ observed that the relaxation of COVID-19 rules has raised hopes of improving consumer demand. They added that the package of support for the property sector has further boosted sentiment for the metal used in power and construction.
Market data shows that copper has risen 4 per cent in the first week of December after rising 10.6 per cent in November as expectations began to build that China will retreat from its zero-COVID policies.
China, during the week, announced the most sweeping changes to its resolute anti-COVID regime since the pandemic began three years ago, loosening rules that curbed the spread of the virus but sparked protests and hobbled the world’s second-largest economy.
China’s Bank of Communications also said it had signed pacts to support eight property firms, easing a liquidity crunch in the sector, which is a major user of metals.
However, Goldman Sachs raised its 2023 forecast for average copper prices to $9,750 per tonne from $8,325 previously. The leading global investment firm said that copper surplus is no longer likely to happen in 2023, with global visible stocks falling to their lowest in 14 years.
For other base metals, LME aluminium was largely unchanged at $2,504 a tonne, zinc gained 0.2 per cent to $3,243 a tonne, tin rose 0.4 per cent at $24,720 a tonne, while lead lost 0.2 per cent to $2,215.50 a tonne.
On the Shanghai Exchange, aluminium was little changed at 19,185 yuan a tonne, zinc traded almost flat at 24,795 yuan a tonne, lead advanced 0.4 per cent to 15,785 yuan a tonne, and tin gained 1.4 per cent to 198,660 yuan a tonne.