HANOI: Copper prices in Shanghai climbed to their highest in more than three weeks on Monday, supported by a rebound in demand in China and on hopes of a US rate cut in September.
The most-traded October copper contract on the Shanghai Futures Exchange closed up 2.2% at 75,170 yuan ($10,559.22) a metric ton, after rising to as high as 75,180 yuan, its highest since Aug. 1, earlier in the session.
Copper wire rod makers have been increasing their orders after prices fell recently and as their downstream customers - grid companies - ramped up output to meet annual production targets, said CRU analyst He Tianyu.
The power sector is one of the biggest consumers of copper. China’s peak consumption season usually starts from mid-September, which might be disrupted if prices return to $10,000 a ton on the LME or 80,000 yuan a ton on SHFE, said He.
LME copper closed at $9,298 a ton on Friday. The LME is closed for a public holiday on Monday. SHFE aluminium rose 0.5% to 19,925 yuan a ton, after hitting 19,990 yuan earlier, the highest since July 16, on supply concerns and US rate cut expectations.
Federal Reserve Chair Jerome Powell on Friday endorsed an imminent start to rate cuts, which could support metals demand as well as pressuring the dollar, making greenback-priced metals cheaper to holders of other currencies.
SHFE zinc hit the highest since July 16 at 24,225 yuan a ton. Tin eased 0.2% to 266,290 yuan but still hovered near a one-week high. China’s Yunnan Tin, the world’s largest refined tin producer, began the maintenance of its smelting equipment from Aug. 25, which is expected to last up to 45 days. SHFE nickel climbed 1.5% to 131,350 yuan and lead increased 2.5% to 17,830 yuan.
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