Copper rises with signs of active demand from China
COPX•Copper gains on signs of Chinese demand
Copper prices rose on Wednesday, supported by signs of active demand in top consumer China, though traders remained wary of potential volatility ahead of the U.S. Federal Reserve's interest rate decision.
Three-month copper on the London Metal Exchange CMCU3 gained 1.1% to $14,231 a metric ton in official open-outcry trading.
The metal, used in power and construction, is down 4% since hitting a record high of $14,875 last week, as the premium of the COMEX copper futures against London prices 0#LMECMXCU: fell sharply.
Meanwhile, the Yangshan copper premium SMM-CUYP-CN, a gauge of Chinese demand for imported copper, rose 7% to $118 per ton, its highest level in almost four years, on Wednesday.
Chinese buyers are taking advantage of the recent price dip to restock copper, helping lift import premiums, said David Wilson, head of metals strategy at BNP Paribas.
Inflows to the U.S. Comex copper stocks slowed down after Reuters reported last week that the White House had yet to decide on refined copper tariffs as officials assess concerns that higher prices could raise manufacturing costs.
LME copper tightness has eased significantly, with spreads moving into contango CMCU0-3, although that appeared to be driven more by sentiment than by a major increase in available inventory as uncertainty over the U.S. tariffs persists.
Other base metals rise on supply concerns
In other LME metals, zinc prices were up 0.3% at $3,835 in official activity, supported by tight inventories outside China, which keep the premium of the LME cash contract over the three-month contract CMZN0-3 at $124 per ton.
Aluminium added 1.1% to $3,288 due to worries about the effect of the Iran war on supplies from the Gulf producers. Aluminium Bahrain ALBH.BH is producing aluminium at around 80% of pre-Iran war levels, its CEO said.
