Copper climbs on signs of improving Chinese demand

Copper prices rose on Friday, supported by signs of improving demand from China, the world’s largest consumer of metals, as buyers there sought to boost inventories ahead of a long national holiday.

Three-month benchmark copper on the London Metal Exchange (LME) gained 0.4% to $9,982 per metric ton in official open trading.

Even so, the metal remains down 2% from Monday’s peak of $10,192.50 — its highest level in 15 months — after traders took profits following the US Federal Reserve’s decision to cut interest rates on Wednesday.

The Yangshan copper premium — which reflects demand for imported copper into China — jumped 1.8% to $57 a ton on Friday.

Chinese consumers typically purchase copper for restocking ahead of the national holiday running from October 1 to 8, a period that often brings a slowdown in economic activity.

Citi, in a research note, projected copper prices to range between $9,500 and $10,500 a ton in the fourth quarter before climbing to $12,000 in 2026, helped by a weaker dollar at a time when rising metal output won’t be enough to offset growing demand.

The bank also forecast refined copper consumption to rise by 2.9% next year to 27.5 million tons, pushing the global market from a surplus of 63,000 tons this year into a deficit of 308,000 tons.

Other LME metals:

Aluminum was steady at $2,683.5 a ton. It had touched a six-month high of $2,720 on Tuesday, when the cash-to-three-month spread widened to $16 a ton, the highest since March, before narrowing back to $4. Citi noted that aluminum’s underlying market conditions remain “globally balanced,” forecasting an average Q4 price of around $2,650.

Zinc fell 0.7% to $2,896 a ton. While LME-registered inventories have dropped in recent months — signaling tightness in the galvanized steel feedstock — industry sources said spot supply remains ample.

Lead rose 0.1% to $2,008 a ton.

Tin inched up 0.1% to $33,750.

Nickel advanced 0.3% to $15,320.