Copper set for weekly gain as China demand offsets US policy pressure

Copper also benefited as oil prices fell for a third session. Easing concerns over Saudi supply disruptions outweighed fresh fighting between Saudi Arabia and Iran-backed Houthis in the Middle East. Brent crude LCOc1 fell near 1% today, but remained well above $100 a barrel.

Among other LME metals, aluminium CMAL3 fell 0.4%, nickel CMNI3 slipped 0.1% and tin CMSN3 declined 0.3%, while zinc CMZN3 rose 0.2% and lead CMPB3 gained 0.3%.

On the SHFE, aluminium SAFcv1 rose 0.6%, zinc SZNcv1 advanced 1.5%, lead SPBcv1 gained 2.0%, nickel SNIcv1 added 0.6% and tin SSNcv1 climbed 1.1%.

Signs of firmer physical buying in China have strengthened after copper retreated from record highs last week, helping to offset headwinds from US policies.

Washington has yet to decide whether to impose tariffs on refined copper, Reuters reported last week, while the Federal Reserve raised rates by 25 basis points this week and indicated another increase could follow this year.

Copper's resilience was showcased in premiums. The Yangshan copper premium SMM-CUYP-CN, a gauge of Chinese demand for imported copper, rose to $121 a ton on Thursday, its highest since October 2022. The premium has climbed from $85 at the end of last week.

Domestic premiums remained elevated, with the premium paid over SHFE copper SMM-CU-PND at 630 yuan a ton on Thursday, slightly below 645 yuan the day earlier as the exchange price recovered.

Copper was set to end the week higher on Friday, as stronger physical demand in China helped withstand pressure from US tariff uncertainty and higher interest rates.

Three-month copper on the London Metal Exchange CMCU3 slipped 0.2% to $14,467.50 a metric ton by 0331 GMT, but was on track to gain around 1.6% for the week.