Copper rises on hopes of stronger demand, support from global stocks

LONDON: Copper prices rose for the third consecutive session on Thursday on hopes for improved demand in China following recent price drops and as world stock markets hit record highs.

Three-month copper on the London Metal Exchange (LME) was up 0.6% at $9,847.50 per metric ton by 1606 GMT. Buoyed by expected demand from the green energy transition, copper hit a record high of $11,104.50 on May 20. Since then, prices have been weighed by sluggish data from top metals consumer China and uncertainty over interest rates.

The recent price decline, however, drew back some orders from Chinese end-users, leading to a drawdown in domestic spot stockpiles, China’s Jinrui Futures said.

In the broader market, Wall Street returned from a day off and pushed the MSCI All-World index to a new all-time high for the second day running, buoyed by AI stocks and hopes for lower interest rates. Spot gold prices rose 1.2%.

Meanwhile, copper stockpiles in LME-registered warehouses reached 161,925 tons, their highest since Jan. 4, after delivery of 3,450 tons in Asia, daily LME data showed.

“Chinese smelters continue to increase output despite tight concentrates supply and negative treatment charges, and with the import arbitrage closed, Chinese exports are showing up on the LME,” Macquarie said in a research.

Macquarie sees the global copper market in a small deficit in 2024 and in a surplus in 2025-2027 before a bigger deficit forms and pushes copper to $11,500 per ton in 2028.

“Higher copper prices this year have already done a lot to rebalance the market by encouraging more scrap processing, thereby offsetting the concentrate tightness at Chinese smelters,” Macquarie said. Further on the supply side, Brazil’s Vale raised the forecast for its 2026 copper and nickel output on Thursday.

LME aluminium added 0.9% to $2,522 a ton, zinc rose 0.1% to $2,870.50, lead was up 0.8% at $2,215, tin jumped 2.2% to $33,025 and nickel climbed 0.3% to $17,420.