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Copper prices rebounded sharply as investors anticipated Chinese government support for the country's property sector, which consumes significant industrial metals. The rebound follows a brief decline after copper hit record levels recently. Analysts highlighted persistent deflationary pressures and weak domestic demand in China, strengthening expectations of further stimulus. Supply disruptions and tighter flows to the U.S. have already pushed copper prices up by over 30% this year. Other metals, including aluminium, lead, tin, zinc, and nickel, displayed mixed movements amid continued market volatility and policy uncertainties.
Copper prices rebounded, approaching record levels, driven by expectations of fresh stimulus in China, particularly for its struggling property sector. The benchmark three-month copper contract on the London Metal Exchange rose 0.7% to USD 11,564 a metric ton, following a 1.3% decline the previous day. It had recently reached a record high of USD 11,771 a metric ton. Advertisement
Shares in China's property sector surged amid reports that the government is considering a mortgage subsidy package worth 400 billion yuan (USD 56.63 billion). The property sector is a significant consumer of copper and other industrial metals, making the stimulus crucial for demand. Analysts observed that recent construction data in China has been weak, suggesting that more policy support is likely to sustain the sector.
The broader Chinese economy is also showing signs of slowdown. Deflationary pressures continue, and domestic demand remains sluggish, reinforcing the need for targeted stimulus measures. Copper prices on the London Metal Exchange have risen about 32% this year, fueled by concerns over mine disruptions and tightening supply flows to the U.S., which have constrained global availability.
Market experts indicate that prices could continue rising, with projections reaching USD 12,000 per metric ton before the year ends. On the Shanghai Futures Exchange, the most traded copper contract closed slightly lower at 91,850 yuan a ton. Investors were also monitoring the U.S. Federal Reserve, which is expected to cut interest rates while signaling caution over future reductions. Analysts at Chinese broker Jinrui highlighted that uncertainty around U.S. rate cuts has led investors to reduce positions, yet supply constraints outside the U.S. continue to keep prices elevated and volatile.
Other industrial metals showed mixed performance. Aluminium rose 0.4% to USD 2,868 a ton, lead increased 0.1% to USD 1,979.50, tin gained 0.3% to USD 39,990, while zinc fell 0.3% to USD 3,082 and nickel slipped 0.5% to USD 14,665. These trends underline the sensitivity of metal markets to both global supply dynamics and regional policy developments.
Source Reuters
5th Jun, 2025
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