Chinese copper producers rally as copper prices rise on improving demand outlook from China
Chinese copper producers rally as copper prices rise on improving demand outlook from China

Chinese copper producers rally as copper prices rise on improving demand outlook from China

 

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Chinese copper producers staged a strong rally in Hong Kong driven by rising copper prices, with Wangguo Mining surging 11.5%, MMG jumping 6.2% and Jiangxi Copper up 5.5%.

Copper prices rose on Tuesday, supported by improving demand outlook from top consumer China and looming concerns of raw material supplies. 

Three-month copper on the London Metal Exchange rose 1.1% to $8,964 per metric ton, resuming trading after a long weekend and Easter holiday. The most-traded May copper contract on the Shanghai Futures Exchange added 0.4% to 73,140 yuan ($10,115.48) per tonne, not far from an all-time high of 73,530 yuan touched on March 22. Shanghai copper recorded its best daily gain in two weeks on Monday after an official survey showed China’s manufacturing activity expanded for the first time in six months in March.

Although trading was subdued because of the holiday, sentiment improved with fears of further supply tightness of copper concentrate, ANZ analysts noted.

Under the expectations that European and US central banks will start interest rate cut this year, commodities will support industrial and consumer demand, Goldman Sachs said in a recent report. A US rate cut in a non-recessionary scenario would push up commodity prices, with metals being the most stimulated, particularly copper and gold, followed by crude oil, it said.

Global copper supply is expected to see a gap of 250,000 tonnes in the second quarter of 2024 and the gap is expected to expand to 450,000 tonnes in the second half, which will boost copper price to $10,000 per tonne by the end of this year, the bank had estimated.