Copper prices climbed on Tuesday, fueled by the possibility of interest rate cuts, a weaker dollar, and strong industrial profits in China. Benchmark copper on the London Metal Exchange rose 1.1% to $10,435 a metric ton, after hitting a record high last week. The surge in copper prices has been driven by expectations of increased demand in sectors such as electric vehicles, automation, and artificial intelligence.
However, some analysts have raised concerns about the disconnect between copper prices and market fundamentals. BNP Paribas analyst David Wilson noted that while there is optimism around future demand for copper, the market currently appears well-supplied, especially in China. Copper stocks in Shanghai warehouses have increased significantly, and China’s daily refined copper production rate is at a record high.
Despite these concerns, copper prices continue to climb due to the overall positive sentiment in the market. Traders are also keeping an eye on U.S. inflation data and surveys of purchasing managers in China’s manufacturing sector to assess future demand prospects.
In other metals, aluminum, zinc, lead, tin, and nickel also saw gains on Tuesday. With the ongoing uncertainty in global markets, the future direction of metal prices remains uncertain, but for now, copper continues to be in the spotlight as investors navigate the complex factors influencing the market.
