Copper headed for a weekly gain, as signs of Chinese demand and possible supply disruption at a Chilean mine boosted the metal.
Futures rose as much as 1.2% on the London Metal Exchange on Friday, gaining after trading began on the main rival Chinese bourse. Inventories in the top consumer are low following a national holiday, meaning restocking may take place in the weeks ahead. A gauge of import demand hit a four-year high.
Copper is consolidating just below record levels, supported by the threat of US import tariffs, which has lured supplies to America and tightened conditions elsewhere. Investors are also monitoring the impact of the Iran war on energy prices and broader investor appetite for risk assets, which could complicate the outlook for interest rates and economic growth.
Minutes from the Federal Reserve’s September meeting showed unity around its decision to raise interest rates, which has most investors betting on an additional hike at the bank’s December meeting rather than later this month. Tighter monetary policy is typically negative for copper demand.
Traders are also honing in on a strike at Antofagasta Plc’s Centinela mine — one of Chile’s largest — which unions say would start affecting output within two weeks. The company has maintained its production outlook.
“We remain constructive for copper, supported by supply risks, seasonal Chinese demand and continued tariff uncertainty,” StoneX analysts including Natalie Scott-Gray wrote in a note. Still, downward risks remain in the form of sticky inflation and hawkish central banks, they added.
Copper rose 1.2% to $14,474.50 a ton on the LME at 10:36 a.m. in Singapore. It’s on track to finish the week about 1.5% higher. All other major contracts advanced, led by tin, which added 1.5%.
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