Shanghai Copper Prices Climb Amid Signs of Reviving Demand in China
Shanghai copper prices rose over 1% due to improving demand from China, driven by growth in grid infrastructure and electric vehicles. Despite expected declines in refined copper output in April and concerns of a global trade war, overall market sentiment remains positive. Other base metals also experienced slight increases in pricing.
Recent developments in the Shanghai copper market indicate a positive trend, as prices rose more than 1% owing to improving demand signals from China, the leading consumer of metals. As of 0234 GMT, the prevalent copper contract on the Shanghai Futures Exchange was priced at 78,760 yuan ($10,901.34) per metric ton, marking a 1.25% increase.
Analysts from ANZ have noted that underlying fundamentals are strengthening, particularly in grid infrastructure and electric vehicles, as reflected in their Downstream Copper Demand Indicator. Stimulus measures have enabled manufacturers to enhance production levels, resulting in reduced copper cathode inventories in Shanghai and Guangdong, where imports have decreased.
However, an upcoming decline in refined copper output is anticipated in April due to smelters commencing maintenance activities, coupled with reduced capacity utilization by those experiencing financial losses, according to First Futures. In the January-February period, copper cathode output noted a 5.28% year-on-year increase to 1.9 million tons, with forecasts predicting a 4.32% rise in March to 969,000 tons.
China is responsible for approximately half of the global annual copper consumption. However, concerns surrounding a potential global trade conflict have somewhat constrained price increases, as pointed out by ANZ analysts. Meanwhile, other metals such as aluminium, zinc, and tin also recorded gains in the market, with SHFE aluminium rising nearly 1% to 20,960 yuan a ton.
Internationally, the three-month copper prices on the London Metal Exchange (LME) saw a slight increase of 0.03%, reaching $9,682 per ton. Moreover, several other metals on the LME displayed mixed performance, reflecting the nuanced dynamics of the market today.
The increase in Shanghai copper prices signals a rebound in demand within China, bolstered by growth in key sectors such as grid infrastructure and electric vehicles. Despite anticipated reductions in refined copper output due to maintenance and lower capacity utilization, the overall trend remains optimistic for copper consumption. However, the threat of a global trade war continues to pose a risk to further price increases. The metals market shows varied performance across different commodities, indicating a complex market environment.
Original Source: www.tradingview.com
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