Mumbai, 08 Oct (Commoditiescontrol): Overnight, copper prices on the London Metal Exchange (LME) saw fluctuations, opening at $9,949/mt, reaching a high of $9,981/mt before dipping to $9,860/mt, and closing at $9,952/mt. Trading volumes were active with 12,000 lots, and open interest stood at 300,000 lots. Meanwhile, the Shanghai Futures Exchange (SHFE) was closed due to holidays in China.
Globally, US non-farm payrolls data has lowered the likelihood of a significant 50-basis-point interest rate cut by the Federal Reserve this year. While some Fed officials have indicated further rate cuts are possible, traders now expect more modest reductions. The strengthening US dollar continued to exert downward pressure on copper prices.
Adding to the uncertainty, escalating geopolitical tensions between Israel and Iran have raised concerns. Reports indicate that Israel is preparing for potential retaliation against Iran, while Iran’s Tasnim News Agency has stated that Iran has plans ready to respond. This growing conflict in the Middle East has further heightened market volatility.
In the China market, the focus is on upcoming domestic economic developments. Ahead of the holiday season, China downstream copper buyers had mostly completed their restocking, resulting in slower spot market activity. With copper prices remaining elevated, premiums have started to decline.
Copper cathode inventories in major Chinese regions have begun to rise again, reversing the recent destocking trend. The market is expecting a slight inventory build-up post-holiday, with the likelihood of premiums falling further. Data shows that as of September 30, copper stocks rose by 11,200 mt, bringing total inventory to 165,500 mt.
Despite the global headwinds from a rising US dollar and geopolitical risks, optimism persists regarding China's domestic demand for copper, driven by supportive government policies. These factors are likely to provide underlying support for copper prices.
(By Commoditiescontrol Bureau; +91-9820130172)
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