Shanghai copper prices showed notable strength on Wednesday, driven by signals of improving demand in China, a key consumer of the metal. The most-active copper contract on the Shanghai Futures Exchange (SHFE) rose by 2.08%, closing at 79,410 yuan ($10,962.02) per metric ton.
During the day, prices peaked at 79,470 yuan—the highest level since September 30. Industry analysts from ANZ noted that the underlying fundamentals for copper are strengthening, particularly in the areas of grid infrastructure development and electric vehicle production.
They mentioned that recent stimulus measures are enabling manufacturers to increase their output, while copper inventories in major regions like Shanghai and Guangdong are dwindling due to a reduction in imports. Looking ahead, refined copper production in China may decrease in April.
Analysts from First Futures highlighted that several smelters are planning maintenance and some with considerable losses are likely to cut back on production capacity. Nevertheless, copper cathode production from surveyed smelters increased by 5.28% year-on-year to 1.9 million tons during the first two months of the year.
Antaike, a state-backed research organization, anticipates a 4.32% rise in March output compared to the previous year, reaching 969,000 tons. It’s important to note that China accounts for approximately half of the world’s copper consumption.
Despite these positive trends, concerns about the potential onset of a global trade war have tempered significant price increases, as analysts at ANZ cautioned. In related markets, SHFE aluminum, zinc, tin, lead, and nickel also saw price increases.
In international markets, three-month copper on the London Metal Exchange (LME) rose by 0.5% to $9,727.5 per ton. Other LME metals experienced mixed performance, with slight gains in aluminum, lead, and nickel, while zinc and tin faced minor declines.