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LME copper reaches record high on Chinas property stimulus measures

20 May 2024 8:54 am
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Mumbai, 20 May (Commoditiescontrol): London Metal Exchange (LME) copper prices soared to record highs on Monday, driven by China’s new property stimulus measures and stronger-than-expected industrial output data. Systematic buying further fueled the rally.

Three-month copper on the LME surged 2.7% to $10,959.50 per metric ton, after hitting a historic high of $11,104.50 earlier in the session, marking a 4.1% increase. Meanwhile, the most-traded July copper contract on the Shanghai Futures Exchange (SHFE) climbed 5% to 87,470 yuan ($12,099.04) per ton, reaching a record high of 88,940 yuan, a 6.8% increase.

China announced significant steps on Friday to stabilize its struggling property sector, including the central bank providing 1 trillion yuan in extra funding and easing mortgage rules. Local governments are also set to purchase some apartments to aid the sector.

Additionally, China’s industrial output grew 6.7% year-on-year in April, up from 4.5% in March and surpassing the 5.5% increase predicted by analysts in a Reuters poll, bolstered by improving external demand. The industrial sector’s large consumption of base metals contributed to the price surge.

Traders indicated that the copper price rally on Monday was intensified by systematic traders who chased the rising prices. However, the futures prices did not reflect an increase in physical market demand. The premium for importing copper into China’s Yangshan area dropped to zero on Friday from $60 in March, indicating weak import demand.

Despite May traditionally being a strong season for copper demand in China, SHFE copper inventories have remained high over the past two months, with stockpiles at 290,376 tons, up from 33,130 tons at the start of the year.

In other metals, LME aluminum rose 0.4% to $2,623.50 a ton, zinc increased 0.9% to $3,057.50, lead climbed 0.8% to $2,301.50, tin edged up 0.4% to $34,375, and nickel was up 0.1% at $21,100.

On the SHFE, aluminum rose 1% to 21,035 yuan a ton, nickel jumped 4% to 156,320 yuan, zinc advanced 2% to 24,255 yuan, lead increased 0.4% to 18,810 yuan, and tin climbed 2.2% to 280,750 yuan.

(By Commoditiescontrol Bureau: 09820130172)


       
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