Copper prices displayed notable fluctuations on Monday, influenced by demand uncertainty, heightened supplies, and the impact of a weakening U.S. dollar. The three-month copper contract on the London Metal Exchange (LME) maintained stability at $8,171 per metric ton, in line with its weekly gains from Friday. Meanwhile, the December contract on the Shanghai Futures Exchange (SHFE), a highly traded commodity, experienced a 0.4% decline, settling at 67,380 yuan ($9,245.08) per ton.
These fluctuations followed a decline in LME and SHFE copper prices during Friday’s trading session, with trading volumes recorded at 21,000 and 32,000 lots, respectively. This decline was attributed to the disappointing U.S. non-farm payrolls report for October, which revealed the smallest job increase since June, with only 150,000 jobs added and downward revisions to total job numbers.
Conversely, lead prices on the LME commenced at $2,128 per metric ton on Friday evening and surged to a new monthly high of $2,174 per ton during the European session, owing to an unexpected drop in stock levels. Late trading ultimately closed at $2,172.5 per ton, reflecting a 2.09% increase. In parallel, SHFE’s December lead contract recorded a 0.51% rise, settling at 16,635 yuan per metric ton.
The inventory of copper across Chinese markets stood at 63,700 metric tons on November 3rd, primarily driven by spot resource replenishment and reduced output from smelters affected by maintenance. This inventory increase was further exacerbated by a rebound in copper prices, which prompted a cautious approach downstream and contributed to lower inventory levels in South China, reflecting an overall decrease in demand.
Despite some recent declines in stocks within LME warehouses, overall inventories have demonstrated an upward trend over time. Copper stocks on SHFE experienced an 11.3% increase last Friday, although they remain near a yearly low. The winter season is anticipated to witness a slowdown in the seasonal consumption of the metal, particularly in the power, transportation, and construction sectors. This slowdown is further compounded by an inconsistent economic recovery in China.
In other noteworthy developments, a roundtable meeting presided over by Sheng Qiuping in Shanghai announced the removal of manufacturing foreign investment restrictions, potentially influencing future market dynamics.
