TMN - Copper

Copper Rises to A-Week Highs Ahead of Crucial China Meeting

Copper prices soared to one-week highs on Monday, reaching $8,569.5 per metric ton, as investors anxiously anticipate outcomes from China’s parliamentary meeting scheduled for Tuesday.

In the Asian evening session, Copper futures ending in May climbed by 0.16% to $3.86 per pound.

The rally reflects hopes that the meeting could unveil growth stimulus measures, countering concerns about stalling demand in China, the world’s leading copper consumer.

Currently trading at $8,525 on the London Metal Exchange (LME), copper’s rise was tempered by apprehensions surrounding China’s economic challenges, including a property crisis, deflation, a stock market downturn, and escalating local government debt.

Furthermore, analysts are closely monitoring plans to bolster economic activity, recognizing the pivotal role China plays in global copper consumption.

Meanwhile, a softer US dollar, which makes dollar-priced metals more affordable for holders of other currencies, was also noted as a positive factor supporting copper prices.

However, concerns linger regarding the slower growth of copper demand in China this year, attributed to reduced investment in the electricity grid and less substantial developments in the solar sector.

Additionally, escalating warehouse stocks in Shanghai and a 65.00% increase in lead stocks since January pose challenges to near-term prices for battery materials. The outcome of China’s meeting will undoubtedly shape the trajectory of copper prices in the coming days.


China’s Weak Economic Data Affects Copper

Copper prices remained largely unaffected by China’s underwhelming economic signals, as Beijing announced a stagnant 5.00% gross domestic product (GDP) target for 2024, mirroring 2023 figures.

Despite pledges of policy support, the absence of concrete growth measures dampened optimism. Additional data revealed a below-expectation growth in China’s services sector for February, underscoring persistent economic weaknesses.

The metals trader commented on the emphasis on the China meeting, expressing anticipation regarding the possibility of significant stimulus measures. In addition, they mentioned that the favorable aspect of a softer dollar was noteworthy.

The red metal’s response reflects cautious sentiment amid uncertainties surrounding China’s economic trajectory.

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