Copper held steady on Wednesday and was set to post its third monthly gain in a row as improving factory activity in China and ongoing tightness offered support in thin pre-holiday trade, while aluminium sank to a two-month low.
Benchmark three-month copper CMCU3 on the London Metal Exchange was down 0.1% to $14,416.50 per metric ton as of 1600 GMT but still on course for a monthly rise of 0.9%. It has gained 7.9% in the third quarter, having hit a record high of $14,875 on September 10.
Activity in China’s copper-intensive manufacturing sector grew in September, with the official purchasing managers’ index rising to 50.1 from 49.8 in August.
In another bullish signal for demand, copper stocks in Shanghai Futures Exchange warehouses CU-STX-SGH declined by 17.8% from last week to 38,744 tons, the lowest since January 2024. The ShFE will close from Thursday for China’s National Day holiday, reopening on October 8.
Copper is finding support from expectations of a relatively tight market balance over the coming quarters, said ING commodities strategist Ewa Manthey.
“While uncertainty around global growth and trade policy remains a consideration, structural demand trends and constrained supply growth should help keep prices well supported through Q4,” she added.
A government-commissioned study in Panama on Wednesday recommended negotiating a new arrangement that could allow a temporary restart of First Quantum Minerals’ (TSX: FM) Cobre Panama mine to facilitate its orderly closure. The site has been shuttered since 2023.
The LME complex was broadly negative, with aluminium CMAL3 losing ground for a third straight session. It fell 1.7% to $3,160, hitting its lowest since July 29.
Marex noted the “bearish technical backdrop” for the lightweight metal, which has slipped below its 55-day moving average, but pointed to support around the $3,100-$3,125 level. “Key will be whether we see move systematic selling,” the broker said in a note.
Zinc CMZN3 shed 1.3% to $3,818.50, tin CMSN3 slipped 0.1% to $53,870 and lead CMPB3 lost 1.2% to $1,874.50, touching its weakest since September 14. Nickel CMNI3 was the sole gainer, nudging up 0.1% to $15,970.
(Reporting by Tom Daly; additional reporting by Dylan Duan and Lewis Jackson; Editing by Ronojoy Mazumdar, Jochelle Mendonca and Shailesh Kuber)
