Copper extended its rally from a five-month low as orders to remove the metal from London Metal Exchange warehouses suggested falling demand from China may have bottomed.
Three-month futures were up 1.8% at 6:04 p.m. in London, boosted in part by the biggest LME copper cancellation since April.
The rise comes after a surge in cathode exports out of China and into the LME grid sent copper prices down 19% from May’s record. China accounts for more than half of global copper consumption, and the exports, combined with weak industrial data, undermined optimism around its demand outlook for artificial intelligence data centres.
An arbitrage window for importing refined copper into China has since reopened, causing premiums for the metal to rise there, while LME withdrawal orders have started to rise. LME data on Monday showed collateral stocks fell by 7,375 tonnes.
The metal also gained ground in response to news that a subsidiary of Chinese copper giant Jiangxi Copper Co. closed its Shandong plant, which produced more than 200,000 tons of copper last year, following a fatal accident. In Africa, copper exports may face a bottleneck due to the weekend border closure between Zambia and the Democratic Republic of Congo, the world’s second-largest copper producer.
Copper could rebound toward $9,100 a tonne as concerns about the possibility of a global recession ease, Jinrui Futures Co. said in a note. Investors are awaiting clearer macroeconomic guidance and further inventory draws, it added.
All base metals advanced, with nickel gaining 1.1%.
With the help of Sana Pashankar.
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