Active demand in China sets copper on track for weekly gain

Copper prices surged for a fourth consecutive day on Friday, edging closer to record highs as demand from the largest consumer, China, remained strong. The London Metal Exchange's three-month copper futures climbed 0.2% to $14,521 a metric ton by 1009 GMT, nearing the September 10 record of $14,875. Over the week, copper prices climbed 2%. Chinese demand for copper, aluminum and flat steel increased 1-2% compared to the same period last year, according to high-frequency data.

Despite the price increase, end-user response to higher copper prices in China was moderate, as reported by Goldman Sachs in a research note. Domestic copper scrap supply in the country was tight, contributing to further delays in the return of copper smelting capacity after maintenance. The Yangshan copper premium, which measures Chinese demand for imported copper, jumped 72% so far in September to $124 a ton, the highest level in nearly four years.

Chinese buyers found dollar-priced metals more appealing as the yuan ended the day at its strongest against the US dollar since mid-2022. Copper stocks available in LME-registered warehouses dropped to 139,650 tons, after 4,500 tons were cancelled in Asia, particularly in Taiwan and Hong Kong. Conversely, copper inventories in Shanghai Futures Exchange warehouses rose 2.4% in the week, reaching 56,073 tons after a three-week decline.

COMEX copper stocks remained relatively stable at 696,631 tons during the week, as the premium between US copper futures and LME prices narrowed. The meeting between US President Donald Trump and Chinese leader Xi Jinping awaited to impact the market. Copper, aluminium, zinc, lead, tin, and nickel showed mixed movements in the market.