Copper, industrial metals climb on macro optimism after US midterms

Copper and the industrial metals complex experienced a significant rally on Thursday, driven by overall macroeconomic optimism. The positive impact of yesterday's US midterm election results was evident in investor sentiment.

The benchmark three-month copper price on the London Metal Exchange increased by 0.48%, trading at $14,078.5 a metric ton by 0300 GMT. Similarly, the most-traded copper contract on the Shanghai Futures Exchange rose by 0.71%, reaching 108,250 yuan ($16,221.85) per ton.

Investors are hopeful that a divided Washington will reduce the unpredictable policy environment that has troubled global markets during the Trump administration. Oil prices plummeted overnight, prompting speculation that the shift of power in Washington could lead to an end to the US-Israeli conflict with Iran, which had negatively affected copper prices by dampening the global growth outlook.

Outside the US, copper remained in high demand. In China, the largest consumer of copper, the Yangshan premium, a measure of its appetite for imported copper, surged to $205 a ton, its highest level in 12 years. However, copper gains were somewhat restrained by concerns that a Democrat victory might curb the development of AI infrastructure.

The decline in the US dollar, which fell by 0.18%, made greenback-denominated commodities more affordable for buyers using other currencies. This, coupled with positive sentiment towards clean energy, led to a rise in solar and clean energy stocks. Nickel, essential in batteries and steel production, saw a notable gain, with prices on both the London Metal Exchange and Shanghai Futures Exchange increasing by double digits.

Among the other metals, aluminum, zinc, lead, and tin also experienced gains. On the Shanghai Futures Exchange, these commodities witnessed particularly strong increases, with tin gaining a remarkable 2.98%.