Copper rises on China demand and supply risks
Copper prices climbed as markets reopened in China, the world’s largest metals consumer, following a week-long holiday.
Copper futures on the London Metal Exchange (LME) gained as much as 1.2%, while other base metals and iron ore futures traded in Singapore also advanced. The return of Chinese investors supported prices, while a strike at the Centinela mine, a major copper production facility in Chile, raised concerns about the global supply outlook. The strike, launched by two unions at the Antofagasta-operated mine, is expected to affect production within approximately two weeks. However, the company said its existing production targets remain unchanged.
Alongside supply-related developments, copper markets are closely monitoring the Federal Reserve’s interest rate policy. Markets are pricing in a 20% probability of a Fed rate hike in October and an 80% probability in December, as investors assess the potential impact of elevated interest rates on commodity demand. The resumption of trading in China is providing short-term support for prices, while the duration of the strike in Chile and its potential impact on production remain key factors for copper’s direction.
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