Key points:
- Copper prices increased 1.5% to $9,108 per metric ton on the LME, while the Shanghai Futures Exchange saw a 0.8% rise to 74,100 yuan per ton.
- Despite Wednesday’s gains, copper is on track for a 5.1% monthly decline, marking the largest drop since May 2023.
Prices of nonferrous metals saw an upward movement on Wednesday, largely influenced by a softer dollar. This rise, however, comes in the shadow of a monthly downturn, driven by weak demand from China, the world’s largest consumer of these metals.
SEE: Copper performance on the VT Markets app.
Three-month copper on the London Metal Exchange (LME) increased by 1.5% to $9,108 per metric ton as of 0623 GMT. Similarly, the most-traded September copper contract on the Shanghai Futures Exchange rose by 0.8% to 74,100 yuan ($10,245.14) per ton.
This increase was supported by the dollar index trading lower, making dollar-priced metals cheaper for holders of other currencies.
Copper still on a downward trajectory
Despite the recent rise, LME copper has experienced a 5.1% loss so far this month, heading towards its most significant monthly fall since May 2023. This decline is largely attributed to the downturn in China’s manufacturing activity, which hit a five-month low in July.
The manufacturing sector, a significant consumer of metals, has been grappling with falling new orders and low prices, indicating a challenging second half for the production powerhouse.
Other metals also saw gains on Wednesday. LME aluminium rose by 1.3% to $2,252.50 per ton, nickel jumped 2% to $16,385, zinc advanced by 1.8% to $2,675.50, lead increased by 1% to $2,055, and tin climbed 4.1% to $29,970. Despite these daily gains, both aluminium and lead are set for their biggest monthly losses since June 2022.
The physical demand for these metals needs to materialise to establish a floor price. Market analysts suggest that a swift price rebound could occur once Chinese buyers are willing to purchase – which indicates potential volatility in the market.
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