Copper prices saw an upswing on Thursday as China’s concerted efforts to stimulate its economy counterbalanced the impact of burgeoning copper inventories. Market participants remain vigilant, awaiting pivotal economic indicators from China.
On the London Metal Exchange, the three-month copper price climbed by 0.6%, reaching $8,464 per metric ton, briefly touching a one-week high at $8,491.
Copper, integral to power and construction, has faced subdued demand this year, attributed in part to China’s gradual economic convalescence following the aftermath of the COVID-19 pandemic. Additionally, the robust U.S. dollar has elevated copper’s cost for buyers transacting in alternative currencies.
Natalie Scott-Gray, an analyst at StoneX, observed, “We are certainly seeing the battle between a strengthening dollar versus supportive stimulus out of China and better than expected data (in China) for August.” She underscored the pivotal role of China’s impending economic data releases in gauging the state of metal demand.
In Beijing, authorities unveiled blueprints for constructing affordable housing, encompassing 62,000 units spanning 49 new projects. With a particular focus on resettlement housing to address housing needs.
China is poised to unveil significant economic data concerning new home sales, property investment, and industrial production. All crucial in shedding light on the nation’s economic vitality.
Meanwhile, across the Pacific, the U.S. witnessed a surge in retail sales for August, surpassing expectations with a 0.6% increase. The Producer Price Index (PPI) exhibited a substantial monthly upswing of 0.7%. Furthermore, initial jobless claims remained lower than anticipated.
Although the European Central Bank (ECB) elevated its key interest rate to a record zenith. Signifying its commitment to quelling inflation, copper stocks domiciled in LME-registered warehouses are presently at their zenith since October 2022, reflecting substantial growth from July through September.