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Copper Approaches $10,000 per Ton, Attracts More Investors

April 26, 2024

Copper prices have been inching closer to the $10,000 per metric ton mark, reflecting a broader uptrend among base metals driven by increasing investment flows.

On the London Metal Exchange (LME), the price for three-month copper reached $9,965.50 per ton, showing a 1% increase, while the Shanghai Futures Exchange (SHFE) reported a 1.5% rise in their most-traded June copper contract, reaching 80,500 yuan ($11,108.96) a ton.

Base Metal Prices Rise Alongside Copper

The uplift in copper prices is echoed across other base metals. LME aluminium saw an increase of 0.2%, priced at $2,568.50 a ton.

Nickel followed suit with a 0.2% rise to $19,190, and zinc prices increased by 1% to $2,877.50. Similarly, lead and tin prices showed modest gains, with lead up by 0.5% to $2,219.50 and tin by 0.2% to $32,950.

On the SHFE, gains were seen with aluminium up 1.1% to 20,555 yuan a ton, nickel rising by 0.4% to 143,120 yuan, and zinc climbing 1.5% to 22,880 yuan. Tin showed an increase of 2.3% to 261,800 yuan, and lead was up by 0.8% to 17,210 yuan.

Low Import Demand in China

The recent peak in LME copper prices nearly reached a two-year high, touching $9,979 a ton. This upward trajectory places LME copper on a path for its fourth consecutive week of gains.

In contrast, the Yangshan copper premium rebounded to $2.5 a ton, though this remains considerably lower than the $67.50 recorded at the start of the year, suggesting a muted appetite for importing copper into China.

LME Aluminium Set for Possible Downturn

On the downside, LME aluminium appears poised for a downturn, marking a potential end to six consecutive weeks of gains, with a 3.9% decrease this week alone. This could represent the worst weekly performance since early January. Additionally, LME tin experienced a significant drop of 7.4% week-on-week, marking the most considerable decline since September 2023.

These trends suggest a mixed outlook for base metals. Copper’s surge towards the $10,000 threshold could be tempered by geopolitical tensions or shifts in economic policies, reminiscent of the volatility observed during the 2011 commodity boom.

Conversely, the decline in tin and aluminium might hint at underlying weaknesses in specific sectors, potentially linked to a slowdown in industrial demand or adjustments in supply chains.

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