Business Standard ·
Copper rallies as Chinese buyers return to market, demand outlook brightens
Copper prices rose 1.6% on the LME as Chinese buyers returned after a selloff, while stronger physical demand and a softer dollar supported the metal
Copper gains as Chinese physical demand strengthens and a softer dollar makes dollar-priced metals cheaper
Copper prices rallied on Thursday as Chinese buyers returned to the market after a recent selloff while demand prospects brightened and the dollar softened.
Benchmark copper on the London Metal Exchange was up 1.6 per cent at $14,456 a metric tonne at 1328 GMT. Prices of the metal, used in the power and construction industries, have dropped around 4 per cent since hitting a record high of $14,875 a tonne on September 10.
The dollar rose after the US Federal Reserve raised interest rates and reaffirmed its commitment to curbing inflation. But later in the session it retreated as oil prices extended their decline.
A softer US currency makes dollar-priced metals cheaper for holders of other currencies, which would boost demand.
Chinese buyers are back though volumes are not “massive”, said Alastair Munro, senior base metals strategist at Marex. He said Chinese demand was real physical buying, not just speculation.