Onome Amuge
Copper prices inched higher on Wednesday, buoyed by expectations that a deal in Washington would end the US government shutdown, while investors awaited key lending data from China to assess demand prospects in the world’s top metals consumer.
Benchmark copper on the London Metal Exchange rose 0.2 per cent to $10,853 a tonne in official trading, extending gains made earlier in the week. The metal hit a record high of $11,200 last month, driven by supply constraints following mine disruptions, including a major accident in Indonesia.
The US House of Representatives was expected to vote later on Wednesday on a compromise bill to reopen federal agencies after a shutdown that began on October 1. Traders said optimism over the return of US economic data—vital for the Federal Reserve’s assessment of growth and inflation—had underpinned sentiment.
The Fed’s policy decisions will also influence the direction of the US dollar, with a weaker currency typically making dollar-denominated commodities more attractive to holders of other currencies.
However, concerns over softer credit growth in China weighed on the outlook. Market participants are bracing for subdued bank lending and a fall in total social financing, considered key indicators of industrial activity and metals demand.
Elsewhere in the base metals complex, zinc inventories on the LME fell to 35,875 tonnes, their lowest since February 2023. The heavy decline has pushed the cash contract to a significant premium over the three-month price, a structure that would usually draw metal into exchange warehouses. This time, however, physical shortages have limited inflows.
Stocks tracked by the Shanghai Futures Exchange have also slipped, down 8 per cent over the past two weeks to 100,208 tonnes. Three-month zinc eased 0.3 per cent to $3,058 a tonne.
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