Copper prices surged to an 11-week high on Thursday, driven by optimism over increased metals demand after China unveiled new fiscal stimulus measures. This followed recent monetary policy easing aimed at boosting the country’s slowing economy.
On the London Metal Exchange (LME), three-month copper rose 1.4%, reaching $9,950 per metric ton by 1030 GMT, marking its highest level since July 9. Chinese leaders committed to “necessary fiscal spending” to meet their 2024 economic growth target of around 5%, which was announced after the central bank implemented its largest stimulus since the pandemic, including key interest rate cuts.
China’s fiscal plans include the issuance of special sovereign bonds worth approximately 2 trillion yuan ($284.43 billion), according to sources. Amelia Xiao Fu, head of commodity market strategy at Bank of China International in London, commented, “Yesterday, there was uncertainty about fiscal stimulus following monetary easing, but today’s news confirms it, making the outlook positive for supportive measures in China.”
Copper prices are likely to push towards their record high of over $11,100 set in May, although future demand will depend on the impact of these stimulus measures, Fu added.
In China, the most-traded November copper contract on the Shanghai Futures Exchange (SHFE) closed up 0.4% at 77,740 yuan ($11,072.18) per ton.
While the initial surge in copper prices sparked some profit-taking, the longer-term outlook remains optimistic, with traders viewing China’s stimulus measures as a strong positive indicator for the market.
Other metals also saw gains, with LME aluminium up 1.6% to $2,578 per ton, nickel up 0.1% to $16,815, lead rising 2.1% to $2,139.50, zinc climbing 2% to $3,058, and tin advancing 0.9% to $32,375 per ton.
