Copper prices rise to record highs amid Chinese real estate actions, positive industrial data

(MENAFN) On Monday, copper prices soared to unprecedented levels, fueled by measures aimed at bolstering China's real estate sector and encouraging industrial data that has spurred buying momentum in the base metals market over the past month. The price of three-month copper on the London Metal Exchange (LME) surged by 2.8 percent, reaching USD10,962.50 per metric ton by 07:18 GMT. Earlier in the session, it had climbed even higher, by 4.1 percent, hitting a historic peak of USD11,104.50 per metric ton, as reported by Reuters. Similarly, the most actively traded copper futures contract for July on the Shanghai Futures Exchange saw a significant rise, closing 5.3 percent higher at 87,670 yuan (USD12,124.52) per ton, after reaching a record level of 88,940 yuan per ton earlier in the session, marking a 6.8 percent increase.

These sharp rises in copper prices followed China's announcement of historic measures on Friday to stabilize its struggling real estate sector, alongside a 6.7 percent year-on-year growth in industrial production in April, driven by increased external demand. One trader observed that the surge in copper prices on Monday was further amplified by regular traders who swiftly reacted to the upward price movement. As a result, LME copper has risen 28 percent year-to-date, while copper on the Shanghai Futures Exchange has jumped 25 percent over the same period.

Despite these impressive gains, futures prices do not necessarily indicate a corresponding increase in actual copper demand. The copper import premium to China's Yangshan region stood at zero on Friday, a sharp decline from USD60 in March, signaling weak import demand. Additionally, copper stocks have recently swelled to approximately 290,000 tons, a significant rise from 33,000 tons at the beginning of the year, despite May typically being a period of robust copper demand in China. 

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