Copper rises as improving China demand counters Fed rate hike
XLB•Other base metals move mixed
Among other LME metals, aluminium CMAL3 fell 0.2% and zinc CMZN3 was little changed, while lead CMPB3 rose 0.6%, nickel CMNI3 gained 0.6% and tin CMSN3 added 0.3%.
Elsewhere on SHFE, aluminium SAFcv1 rose 0.3%, zinc SZNcv1 was little changed, lead SPBcv1 jumped 1.5%, nickel SNIcv1 climbed 1.5% and tin SSNcv1 advanced 1.4%.
($1 = 6.7088 Chinese yuan renminbi)
Copper gains on firmer China demand
Copper rose on Thursday as signs of improving physical demand in top consumer China outweighed pressure from the U.S. Federal Reserve's interest rate hike.
Three-month copper on the London Metal Exchange CMCU3 rose 0.2% to $14,260.50 a metric ton by 0310 GMT, while the most-traded copper contract on the Shanghai Futures Exchange SCFcv1 advanced 0.9% to 108,380 yuan ($16,154.90) a ton.
Physical copper demand in China has shown signs of improvement as the price pullback from last week's highs gave buyers an opportunity to restock, traders said. LME copper has fallen more than 4% from a record high of $14,875 hit last week, while its Shanghai peer is about 3.5% below last week's peak of 112,330 yuan.
Premiums strengthen as Fed decision weighs on metals
The pickup in demand was reflected in stronger physical premiums. The domestic copper premium SMM-CU-PND, paid over the SHFE price, climbed to 645 yuan a ton on Wednesday, its highest since December 2023. The Yangshan copper premium SMM-CUYP-CN, a gauge of Chinese demand for imported copper, rose to $118 a ton on Wednesday, its highest in nearly four years.
A stronger U.S. dollar =USD following the Fed's rate hike remained a broader headwind for metals. The Fed raised its benchmark interest rate by 25 basis points on Wednesday, as widely expected.
