Key Takeaways
- Copper prices increased, set for a third consecutive monthly gain.
- Chinese factory activity improved, with the official PMI rising to 50.1.
- Trading remained subdued ahead of a week-long holiday in China.
Copper prices rose on Wednesday, marking a potential third consecutive monthly gain, driven by improved factory activity in China.
The official purchasing managers' index (PMI) for China’s manufacturing sector increased to 50.1 in September from 49.8 in August, indicating a return to growth.
A private survey by RatingDog showed factory activity expanding at a faster pace, with its PMI reaching a five-month high of 52.1 from 51.5.
Benchmark three-month copper on the London Metal Exchange was up 0.2% to $14,465 per metric ton as of 0930 GMT, on course for a monthly rise of around 1.2%.
The domestic premium for physical copper in China has slipped from last week’s peak of 1,375 yuan ($205) a ton to 1,050 yuan a ton.
The Yangshan premium, a gauge of appetite for imported copper, rose slightly to $119 a ton.
Trading remained subdued ahead of China’s National Day holiday, which will close the Shanghai Futures Exchange from Thursday and reopen on October 8.
Copper is finding support from expectations of a relatively tight market balance over the coming quarters, according to ING commodities strategist Ewa Manthey.
While uncertainty around global growth and trade policy remains a consideration, structural demand trends and constrained supply growth should help keep prices well supported through Q4, she added.
