Key Takeaways
- Copper prices edged up on Monday following the US Federal Reserve’s interest rate hike.
- Benchmark three-month copper on the London Metal Exchange was up 0.06% at $14,530.5 a metric ton.
- Strong demand in China continues to support copper prices despite higher interest rates.
Copper prices saw a modest increase on Monday, rising 0.06% to $14,530.5 per metric ton on the London Metal Exchange by 0300 GMT.
The hike in the US Federal Reserve’s interest rate last week removed the biggest near-term uncertainty in the copper market, according to analysts from Chinese broker Everbright Futures.
Despite the rate hike, the market remains optimistic about strong demand in China, which continues to support copper prices.
The most-traded copper contract on the Shanghai Futures Exchange also saw a slight increase, rising 0.37% to 109,940 yuan ($16,419.49) per ton.
Analysts noted that higher interest rates can weigh on growth-dependent commodities like copper by dampening global economic growth, but strong demand in China remains a key factor.
The Yangshan copper, a gauge of Chinese demand for imported copper, finished last week at $124 a ton, its highest in nearly four years.
Expectations for inventory replenishment ahead of next week’s National Day holiday in China also offered price support, according to Everbright Futures analysts.
Among other LME metals, aluminium dipped 0.27%, zinc gained 0.52%, lead added 0.21%, nickel gained 0.64%, and tin ticked 0.05% higher.
On the Shanghai Futures Exchange, aluminium lost 0.57%, zinc gained 0.7%, lead gained 0.61%, nickel dipped 0.1%, and tin gained 0.88%.
