Key Takeaways
- Shanghai copper rose to a seven-week high, driven by supply worries and robust Chinese demand.
- London copper prices eased after hitting a six-week peak the previous day.
- Copper inventories in LME-registered warehouses have decreased.
Shanghai copper futures reached a seven-week high on Wednesday, buoyed by concerns over supply and strong Chinese demand. The most-traded contract on the Shanghai Futures Exchange (SHFE) increased by 1.21% to 106,100 yuan ($15,672.55) per metric ton as of 0300 GMT, having earlier touched its highest level since June 3 at 106,760 yuan.
In London, benchmark three-month copper prices on the London Metal Exchange (LME) fell by 0.39% to $13,831.5 per ton after reaching a six-week high of $14,025.5 on Tuesday. The decline in LME copper was attributed to the easing of supply concerns and the strengthening of the US dollar, which made the metal more expensive for buyers using other currencies.
According to Craig Lang, principal analyst at CRU, traders are still delivering metal to the United States, driven by import arbitrage opportunities ahead of potential US tariffs on refined copper. The Yangshan copper premium, a measure of import demand, reached its highest level since December 2023 at $109 per ton on Tuesday.
Supply issues continue to weigh on prices, with smelter maintenance and stockpiling due to typhoons affecting availability. Additionally, tight scrap supply is increasing the demand for copper cathode. Lang noted that these factors are contributing to the current market dynamics.
The ongoing Middle East conflict has pushed oil prices higher, while economists predict the US Federal Reserve will maintain interest rates steady for the remainder of the year. These economic indicators have influenced global metal markets, including copper.
Among other LME metals, aluminium ticked 0.14% higher, zinc climbed 0.17%, lead was steady, nickel added 0.18%, and tin gained 0.02%. On the SHFE, aluminium prices increased by 0.59%, zinc rose 0.59%, lead lost 0.91%, nickel advanced 1.05%, and tin gained 0.76%.
