Copper prices in Shanghai surged to their highest level in over three weeks on Monday, driven by a rebound in demand from China and optimism surrounding a potential U.S. interest rate cut in September.
The most-traded October copper contract on the Shanghai Futures Exchange (SCFcv1) closed up 2.2% at 75,170 yuan ($10,559.22) per metric ton, peaking at 75,180 yuan during the session, marking its highest price since August 1.
Analyst He Tianyu from CRU noted that copper wire rod manufacturers are increasing orders as recent price drops have prompted downstream customers, particularly in the power sector, to ramp up production to meet annual targets. The power sector remains one of the largest consumers of copper.
China typically sees peak copper consumption starting mid-September. However, this trend could be disrupted if prices rise back to $10,000 per ton on the London Metal Exchange (LME) or 80,000 yuan per ton on the Shanghai exchange.
In addition, SHFE aluminum (SAFcv1) rose 0.5% to 19,925 yuan per ton, reaching a high of 19,990 yuan earlier in the day, influenced by supply concerns and expectations of U.S. rate cuts.
Federal Reserve Chair Jerome Powell’s recent comments about imminent rate cuts could bolster metals demand and weaken the dollar, making dollar-priced metals cheaper for holders of other currencies.
SHFE zinc also reached its highest level since July 16, trading at 24,225 yuan per ton. Meanwhile, tin (SSNcv1) eased slightly by 0.2% to 266,290 yuan but remained near a one-week high. Notably, China’s Yunnan Tin, the world’s largest refined tin producer, began maintenance on its smelting equipment from August 25, expected to last up to 45 days.