London – Copper prices hit a four-week high on Friday on renewed demand optimism after top consumer China announced measures to support its property market and as data showed expansion in China’s manufacturing sector.
Three-month copper on the London Metal Exchange was up 1.3% at $8,534 per metric ton at the open outcry session from an earlier $8,548, the highest since Aug. 7. It has climbed 3.6% since Aug. 17.
“The rally in prices this morning is being driven by optimism that China’s demand for metals is likely to have reached a bottom,” Natalie Scott-Gray, a base metals analyst with StoneX told Reuters.
Scott-Gray cited surveys of purchasing managers (PMIs) in China’s dominant manufacturing sector.
“The stand out point for me is that PMI manufacturing new orders (a proxy for domestic demand) rose into expansionary territory for the first time since March 2023.”
China’s factory activity surprisingly returned to expansion in August with supply, domestic demand and employment improving, suggesting official efforts to revive growth might be having some effect.
Beijing has issued a raft of measures to revive its crisis-hit property market, the latest including lowering the existing mortgage rate for first-time home buyers and the down payment ratio in some cities.
“As we enter the months of September and October, we also enter a period of restocking for the metals, as construction can start to resume in cooler, drier months, ” Scott-Gray said.
Elsewhere, lead the strongest performer rose to an eight-month high of $2,295 a ton on speculative buying. It was last up 2.3% at $2,270.
Worries about supplies of the battery metal on the LME market have created a premium or backwardation for the cash lead contract over the three-month . The premium closed at a two-month high of $28.40 a ton on Thursday.
Overall, the lower