Mumbai, 2 Oct (Commoditiescontrol): Copper prices advanced on Wednesday, supported by China’s stimulus measures aimed at boosting demand and rising oil prices fueled by escalating tensions in the Middle East.
On the London Metal Exchange (LME), three-month copper climbed 0.4% to $10,017.50 per metric ton. Other base metals saw mixed movements, with aluminium remaining flat at $2,649, nickel up 0.2% at $17,750, and zinc increasing 0.9% to $3,174.50. LME lead gained 0.4% to $2,116.50 a ton, while tin dropped 0.4% to $33,760.
Tensions surged after Israel and the United States vowed to retaliate against Iran following its missile attack on Israel earlier this week. The potential for a broader conflict in the region heightened concerns over disruptions in oil supply, pushing crude prices higher. Rising oil prices increase production and transportation costs for many commodities, including metals, thereby lending support to the market.
China, the world’s largest metals consumer, has implemented a series of stimulus measures to stimulate its economy, including lowering interest rates, reducing mortgage costs, and easing restrictions on home purchases. These steps are expected to bolster metals demand, which is vital as China accounts for half of the world's metal consumption.
However, trading volumes were light on Wednesday, with both China and India, one of Asia’s fastest-growing metals markets, closed for holidays. Analysts noted that while rising metals prices may spur market activity, they could also dampen physical demand.
Meanwhile, the discount of LME cash zinc contracts to the three-month contract narrowed to $28.48 a ton on Tuesday, the smallest gap since May 2. Additionally, the International Lead and Zinc Study Group revised its outlook, forecasting a 164,000-ton deficit in the global refined zinc market in 2024, due to reduced production in Europe and other regions, reversing earlier predictions of a surplus.
Overall, the market is expected to remain volatile, with geopolitical developments and China's economic policies closely monitored by traders.
(By Commoditiescontrol Bureau: 09820130172)
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