Breaking News:

Saudi Arabia Likely to Keep Oil Prices to Asia Unchanged

Copper Prices Inch Higher on Shifting Sentiment

Copper prices have started to gradually nudge higher on the expectation that demand from China will pick up in the future.

Copper prices nudged up one percent up today to $8,347.50 a ton after Chinese officials vowed to roll out more support for private and state-owned property developers - a market which has been in turmoil following the downfall of Evergrande and Country Garden.

This follows wider measures announced in October by the Chinese state to try and kick start its lagging economy back into gear.

Its sluggish post-pandemic recovery has left copper prices subdued, with demand for the metal not picking up as quickly as many had hoped.

This has meant that copper stockpiles have grown and weighed down on prices over the last few months.

But analysts expect copper prices to rise in the coming months. Futures prices are currently at $3.77/lb, a slow but steady rise from the $3.55/lb of early October and the highest point since the $3.78/lb mark of late September.

This could suggest a positive shift in sentiment toward's China's property and manufacturing industries, both hugely reliant on copper, picking up.

Matthew Gill, head of trading and risk management at London-based commodity trading firm Conexus Partners, said: "The slow opening of China is driving this and we are all waiting to see it re-assert itself as the dominant force."

The annual re-allocation of hedge fund portfolios on commodities could also sway the future direction of copper prices.

Hedge funds allocate 'X' percentage of their portfolio towards certain commodities, and at the end of each year the funds evaluate whether their allocations for that year are worth more or less than they were at the start, and then re-allocate accordingly.

This upcoming period of 're-weighting' in early January is likely to reflect expectations of where prices will go, Gill added.

By City AM

More Top Reads From

Back to homepage

Loading ...

« Previous: Offshore Wind Project Cancellations Add to Copper Demand Concerns

Next: Manufacturing in Major Economies Continues Downward Trend »

City A.M is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and… More