Shanghai copper rises on tight Chinese supply, better demand

Copper prices in Shanghai rose on Thursday, as tight inventories and improving consumption of the metal in top user China lent support.

The most-traded November copper contract on the Shanghai Futures Exchange HG1! closed 1.1% higher at 60,870 yuan ($8,450.06) a tonne.

The commercial property market in China is badly hurt, but demand for copper from other areas like infrastructure projects or renewables picked up amid the government's policy support and accommodating weather conditions at the end of the rainy season, said He Tianyu, a copper analyst at CRU.

Tight supply in some areas of China also helped, said He.

China's bonded warehouse copper inventories (SMM-CUR-BON) were at their lowest on record of 81,800 tonnes. ShFE copper stocks were down 78% since March, while COMEX copper inventories (HG-STX-COMEX) dropped to their lowest since July 2021.

Three-month copper on the London Metal Exchange HG1! fell 1.2% to $7,332 a tonne, as of 0722 GMT, as the dollar DXY clawed back from a recent dip to near a two-decade high, making greenback-priced metals more expensive to holders of other currencies.

LME copper inventories rose to their highest since July 21 at 133,550 tonnes (MCUSTX-TOTAL).

The overall outlook for metals demand globally remained grim, as central banks around the world tightened their monetary policies to curb rising inflation and amid a shortage of energy supply in Europe that could hurt economic activities.

LME zinc ZNC1! fell 0.2% to $2,847 a tonne, tin FTIN1! advanced 0.9% to $20,910 a tonne and aluminium ALI1! dipped 0.1% to $2,121 a tonne.

ShFE lead LEAD1! was up 1% at 15,005 yuan a tonne, tin FTIN1! advanced 0.3% to 179,610 yuan a tonne, aluminium ALI1! edged up 0.1% to 17,990 yuan a tonne and zinc ZNC1! rose 0.7% to 23,785 yuan a tonne.

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($1 = 7.2035 yuan)