Copper prices gained traction in London following a report on China’s plans to expand its strategic reserves of industrial metals, including copper. Though the three-month benchmark rose to $9,970 per metric ton, the lack of details regarding the stockpiling strategy limited market impact. The strengthening U.S. dollar also influenced metals pricing.
Copper prices in London experienced a slight increase on Friday, trading near the significant threshold of $10,000. This rise followed media reports detailing China’s intentions to enhance its strategic reserves of essential industrial metals for the year, including copper, cobalt, nickel, and lithium. The National Food and Strategic Reserves Administration, which oversees commodity stockpiling, has reportedly begun price inquiries and bidding for these metals, as reported by Bloomberg News, although specifics regarding volumes or timing were not disclosed.
As of 0303 GMT, the three-month benchmark copper price on the London Metals Exchange (LME) saw an increase of 0.3%, reaching $9,970 per metric ton. However, a trader noted that the impact of the strategic purchasing news on metals prices was limited due to the lack of detailed information.
Additionally, the strength of the U.S. dollar, supported by the Federal Reserve’s lack of immediate plans to reduce interest rates, played a role in the market. As of 0238 GMT, the dollar index rose by 0.03 to 103.82, having gained 0.36% on Thursday, making dollar-denominated metals costlier for buyers using other currencies.
Other metals showed varied performance on the LME: aluminum increased by 0.3% to $2,666 per ton, lead rose by 0.1% to $2,057.5, and zinc climbed by 0.5% to $2,932. Conversely, tin fell by 0.1% to $35,310, while nickel witnessed a decline of 2.0% to $16,240 per ton. On the Shanghai Futures Exchange (SHFE), copper price rose by 0.2% to 81,540 yuan (approximately $11,252.64) per ton, while other metals displayed mixed results with fluctuations in both directions.
In summary, copper prices increased slightly due to speculation surrounding China’s plan to augment its strategic reserves of industrial metals. However, the impact on pricing was muted due to insufficient details. The strength of the U.S. dollar further influenced metals prices, complicating market dynamics. Overall, these developments suggest cautious optimism as the market anticipates further clarity on China’s stockpiling intentions.
Original Source: www.tradingview.com
