Copper prices climbed on Thursday as Chinese buyers returned to the market following a recent decline, with the metal trading higher despite a US interest rate increase.
Benchmark copper on the London Metal Exchange traded 1.2% higher to $14,408 a metric ton in official rings. The metal, used in the power and construction industries, has fallen 4% since reaching a record high of $14,875 a ton on September 10.
The dollar strengthened after the US Federal Reserve raised interest rates and reaffirmed its commitment to curbing inflation. A rising US currency typically makes dollar-priced metals more expensive for holders of other currencies.
Strong physical demand in the top consumer can be seen in the Yangshan copper premium, a gauge of Chinese demand for copper imports, which rose to $118 a ton on Wednesday, its highest since October 2022.
Domestic physical market premiums, paid over the prices traded on the Shanghai Futures Exchange, climbed to 645 yuan a ton on Wednesday, its highest since December 2023.
Chinese stocks in warehouses monitored by ShFE stood at 54,780 tons, the lowest since January 2024, partly due to traders and producers shipping metal to the United States on the expectation of import tariffs.
