NEW DELHI: Copper on the LondonMetal Exchange was up by 0.5% on Thursday, as investors drew stimulus hope from top consumer China after policymakers’ said they would step up the economy.
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Nevertheless, constant dollar speed has put a ceiling on the rise of prices. The table below shows the fluctuating US dollar prices of some internationally priced products.
Three-month copper LME was 0.5% up at $/m ton at 9,241 during 0410 GMT.
On the SHFE, the most active copper contract for January stood 0.01 percent higher at 75,500 yuan ($ 10,396.01) per ton.
It is stressing that more details will be given this week at China’s Central Economic Work Conference on the main objectives and possible incentives for the following year.
China stated that it will shift from the appropriate tight policy to asserting of monetary lever in the latter part and use a more intense fiscal lever next year.
The US dollar was also virtually flat on Thursday and climbed to the highest in nearly two weeks intraday in the prior session on bolstered US Treasury yields that traders count on the Federal Reserve to cut rates next week.
Copper prices near one-month high on China policy optimism
This is because, as the dollar value is high, the affordability of the metal graded in dollars to users of other currency formulations is low.
Reuters elsewhere translated them as foreseeing their currency as a possibility to allow to weaken next year in anticipation of higher tariffs with the US under another Trump presidency.
ANZ Research said the report also revealed that China may use a depreciated CNY or yuan to pay for its US import tariffs; this received negativity as it will lead to more capital flight rather than equity.
LME aluminum and nickel insisted and were at $2,617.5 a ton and $16,080 as well, respectively; Zinc was at $3,130.5, a 0.2% rise; Pbfell at $2,038.5; a 0.2% decrease; while tin was at $29,995; a 0.1% increase.
Plying its stock to China base metals price SHFE aluminum surged 0.7% to 20515 yuan a tonne Nickel was higher by 2.9 percent to 128950 yuan Tin settled 1.1% higher at 251490 yuan and Zinc was up by 0.3 percent to 25985 yuan While lead declined by 0.7 percent to 17530 yuan.
FAQs
1. Why are copper prices influenced by China?
China is the largest consumer of copper globally, accounting for nearly half of the world’s demand. Its economic policies, infrastructure development, and industrial growth directly affect copper prices.
2. What stimulus measures is China expected to implement?
China often introduces measures such as increased infrastructure spending, tax cuts, interest rate reductions, or credit easing to stimulate its economy. These policies can boost demand for copper in construction and manufacturing.
3. How does infrastructure spending impact copper prices?
Infrastructure projects like building bridges, roads, and power grids require significant amounts of copper for wiring, plumbing, and other components, leading to increased demand.
4. What are the short-term and long-term effects of stimulus on copper prices?
Short-term: Prices may rise due to speculation and increased buying activity in anticipation of higher demand.
Long-term: Sustained demand growth, if the stimulus leads to tangible economic improvements.
5. Are there other factors affecting copper prices?
Yes, factors include: Global economic trends
Supply disruptions (e.g., mining strikes or natural disasters)
Exchange rates and energy costs
Technological advancements and substitution materials.
6. How do investors react to such news?
Investors often buy copper futures or stocks of mining companies in anticipation of price increases, pushing up the market.
7. Is there a link between copper prices and other commodities?
Yes, copper prices often correlate with other industrial metals and global economic trends. It’s considered a barometer for economic health.
8. What role does renewable energy play in copper demand?
Renewable energy technologies, including solar panels and wind turbines, are copper-intensive. Any policy in China promoting renewables can also boost copper demand.