Reviving Property Market Boosts Copper Prices
In a resilient display, copper prices commenced the month on an upward trajectory, brushing aside the impact of a strong U.S. dollar. The positive momentum was fueled by promising demand prospects. Attributed to China’s implementation of further measures to rejuvenate its struggling property market.
The London Metal Exchange reported a 0.8% surge in the three-month copper, reaching $8,487.50 per metric ton by 0136 GMT, recovering from its initial monthly decline since May.
China’s decisive move came in the form of notifications from its central bank and financial regulator on Thursday. These notifications aimed to ease specific borrowing regulations, particularly favoring homebuyers.
The measures included lowering mortgage rates for first-home buyers and reducing down payment ratios in designated cities. With the property market playing a pivotal role in driving demand for industrial metals. This action was well-received within the sector.
Across various metal categories, LME aluminum showcased a 0.8% boost, settling at $2,225 per ton. While tin exhibited a 0.6% increase, reaching $25,550.
Zinc charted a positive course with a rise of 0.8%, attaining $2,449, while lead demonstrated a 0.6% growth, reaching $2,231. Notably, nickel surged impressively by 1.1%, reaching $20,520.
ANZ analysts expressed their optimism about global copper demand, highlighting contributions from the electric vehicle market and India’s rapidly expanding economy. These factors set the stage for a projected surge in copper demand in India, expected to exceed 1.5 million tons by 2025. Marking a substantial 40% increase from 2022 levels.
However, the strong U.S. dollar introduced some restraint, making dollar-denominated metals relatively more expensive for holders of alternative currencies. Simultaneously, the Shanghai Futures Exchange witnessed a marginal 0.1% dip in the October copper contract, concluding at 69,420 yuan per metric ton.
Despite challenges, copper prices appear to draw strength from China’s strategic interventions, fostering optimistic prospects in the global metal market.