Copper Exhibition | Anticipated U.S. Interest Rate Cuts and Improved Chinese Demand Bolster Copper Prices
Copper prices strengthened for a third consecutive session on Friday, underpinned by expectations of U.S. interest rate cuts following a new Federal Reserve appointment and supportive economic signals from China.
On the London Metal Exchange (LME), benchmark three-month copper settled 0.2% higher at $9,700 per metric ton in official trading, continuing its rebound after touching a three-week low on July 31.
Market sentiment was lifted after U.S. President Donald Trump announced his nominee to fill a vacant Federal Reserve seat on Thursday, fueling hopes for interest rate cuts and putting pressure on the U.S. dollar. A softer dollar typically benefits base metals, making them more affordable for buyers using other currencies.
“The weaker dollar has been the key driver so far in August,” said Dan Smith, head of a commodities research consultancy. “With the greenback under pressure and China’s economy showing resilience, the fundamental picture is currently supportive for copper.”
Fresh customs data added further optimism: China’s July exports exceeded expectations, as manufacturers seized on the fragile tariff truce between Beijing and Washington to boost overseas shipments.
For the broader non-ferrous complex, analysts noted that the combination of dollar weakness and improving Chinese trade flows could provide near-term support, though macroeconomic and geopolitical uncertainties remain a key watchpoint.
The most-traded copper contract on the Shanghai Futures Exchange (SHFE) inched up 0.1% to RMB 78,490 per ton ($10,929), extending its recent recovery.
Dan Smith, head of a commodities research consultancy, noted that algorithm-based models tracking momentum-driven fund activity are pointing to bullish potential for LME copper. “I think we could see fresh buy signals emerging next week, with prices potentially breaking above $10,000,” he said.
As of 12:15 GMT, Comex copper futures rose 0.7% to $4.43 per pound, widening the arbitrage spread between Comex and LME copper to $62 per ton.
On the supply side, investors are closely monitoring developments in Chile, the world’s largest copper producer. State-owned Codelco is seeking approval to restart operations at part of its flagship mine following a fatal accident last week.
Performance across the broader base metals complex was mixed. LME aluminium held steady at $2,610 per ton, zinc was little changed at $2,812.50, while tin edged up 0.2% to $33,800. Nickel slipped 0.3% to $15,075, and lead fell 0.6% to $1,998.
Meanwhile, the U.S. dollar index weakened by 0.2% to 98.2 as of 17:13 GMT, after trading between 97.9 and 98.3 during the session. In U.S. trading, September copper futures gained 1.6% to $4.47 per pound as of 17:07 GMT.
Source：Economies.com