Copper set for weekly gain as China demand offsets US policy pressure
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 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. The most-traded copper contract on the Shanghai Futures Exchange rose 1.3% to…
Copper is on track for a weekly increase as buoyant demand from China offsets concerns over U.S. tariff policies and higher interest rates, according to recent market data. The metal closed lower by 0.2% at $14,467.50 per metric ton on the London Metal Exchange, with traders anticipating a weekly gain of approximately 1.6%. On the Shanghai Futures Exchange, the primary copper contract rose 1.3% to 109,500 yuan per ton, marking an increase of about 0.8% so far this week.
The resilience of Chinese copper purchasing has been evident, as signs of stronger physical demand have emerged following a recent pullback from record highs. This positive trend has helped counteract the negative impacts from U.S. policy uncertainty. Washington remains uncertain about potential tariffs on refined copper, while the Federal Reserve has already raised interest rates by 25 basis points this week, signaling further possible increases in the year.
One indicator of China's enhanced demand is the Yangshan copper premium, which rose to $121 per ton on Thursday, the highest level since October 2022. This premium has climbed from $85 at the end of last week, reflecting the growing confidence in China's purchasing power. Domestic premiums also remained elevated, with the premium over Shanghai Futures copper standing at 630 yuan per ton on Thursday, slightly lower than the previous day's figure of 645 yuan as market prices stabilized.
The positive performance of copper was further supported by a drop in oil prices for the third consecutive day. Concerns about potential supply disruptions in Saudi Arabia were outweighed by news of reduced fighting between Saudi forces and Houthis in the Middle East. Brent crude experienced a near 1% decline, but remained well above the $100 per barrel threshold.
Among other LME metals, aluminium fell by 0.4%, nickel slipped by 0.1%, and tin declined by 0.3%, while zinc rose by 0.2% and lead gained 0.3%. Across the Shanghai Futures Exchange, aluminium rose by 0.6%, zinc advanced by 1.5%, lead gained by 2.0%, nickel added 0.6%, and tin climbed by 1.1%.
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