Copper Prices Rise Amid Reports of China’s Stockpiling Plans
Copper prices in London rose slightly after reports of China’s plans to expand its strategic reserves of industrial metals. This increase occurred despite vague details on volumes from the National Food and Strategic Reserves Administration. The dollar firmed, impacting global metal pricing, as other metals exhibited mixed movements on the LME and SHFE markets.
On Friday, copper prices in London showed a slight increase, nearing the notable threshold of $10,000 per metric ton. This uptick followed a report indicating China’s intention to expand its strategic reserves of key industrial metals, which include copper, nickel, cobalt, and lithium. The National Food and Strategic Reserves Administration in China has reportedly initiated price inquiries and bidding for these metals, as reported by Bloomberg News, but specific details regarding volumes or timing remain undisclosed.
As of 0303 GMT, benchmark three-month copper on the London Metals Exchange (LME) rose by 0.3%, reaching $9,970 per metric ton. A trader noted, “The strategic buying news doesn’t have much impact on metals prices today, due to lack of details.” The United States dollar strengthened following the Federal Reserve’s announcement that there is no immediate plan to lower interest rates. Consequently, the dollar index rose by 0.03 to 103.82 at 0238 GMT, building on a 0.36% increase from the previous day.
The appreciation of the U.S. currency affects the pricing of dollar-denominated metals for buyers utilizing alternative currencies. On the LME, prices saw movement across various metals; aluminium increased by 0.3% to $2,666 a ton, lead gained 0.1% to $2,057.5, zinc rose 0.5% to $2,932, while tin decreased by 0.1% to $35,310, and nickel experienced a decline of 2.0% to $16,240 per ton.
In the Shanghai Futures Exchange (SHFE), copper climbed 0.2% to 81,540 yuan ($11,252.64) per ton, with aluminium remaining stable at 20,845 yuan per ton. Zinc saw an increase of 0.6% to 23,895 yuan, lead fell by 0.5% to 17,590 yuan, and nickel lost 0.3% to 129,890 yuan. Tin recorded a gain of 1.0% to 281,620 yuan. It is noteworthy that $1 is equivalent to 7.2463 Chinese yuan renminbi.
The recent increase in copper prices can be attributed to speculation surrounding China’s plans to bolster its stockpile of crucial industrial metals. However, traders remain cautious due to the absence of specific details regarding the stockpiling. The strengthening dollar has also impacted metal prices on the global market, highlighting the interconnectedness of trade and currency fluctuations. Overall, the situation underscores the dynamic nature of metal trading amidst strategic buying initiatives.
Original Source: www.tradingview.com
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