Shanghai copper hits 7-week high on supply worries, strong China demand

SINGAPORE: Shanghai copper rose to a seven-week high on Wednesday as supply worries and firm Chinese demand lifted prices, while London copper eased after touching a six-week peak a day earlier.

The most-traded copper contract on the Shanghai Futures Exchange was up 1.21% at 106,100 yuan ($15,672.55) a metric ton as of 0300 GMT.

Earlier in the day, it touched its highest since June 3 at 106,760 yuan. Benchmark three-month copper on the London Metal Exchange slipped 0.39% to $13,831.5 a ton after hitting a six-week high on Tuesday.

Copper inventories have fallen in LME-registered warehouses and SHFE-monitored warehouses.

Chinese demand looks strong and the market is still waiting for news on potential US tariffs on refined metal.

“Traders are still delivering metal to the US, incentivised by the CME-LME import arbitrage ahead of the US decision on whether to impose a tariff on refined copper,” Craig Lang, principal analyst at CRU, said. Buying remained strong in China.

The Yangshan copper premium, a gauge of import demand, hit its highest since December 2023 on Tuesday at $109 a ton.

Smelter maintenance and stockpiling due to typhoons are weighing on supply, while tight scrap supply is adding to demand for copper cathode, Lang said.

Elsewhere, the widening Middle East war pushed oil prices higher and economists polled by Reuters predicted the US Federal Reserve would keep interest rates steady for the rest of the year.

The dollar strengthened, making copper more expensive for buyers using other currencies.

Among other LME metals, aluminium ticked 0.14% higher, zinc climbed 0.17%, lead was steady, nickel added 0.18% and tin was up 0.02%.

On the SHFE, aluminium gained 0.59%, zinc rose 0.59%, lead lost 0.91%, nickel advanced 1.05% and tin gained 0.76%.