Shanghai copper prices outperformed other base metals on Wednesday, driven by expectations of increasing demand from China’s power and construction sectors.
The most-active copper contract on the Shanghai Futures Exchange (SHFE) closed 2.08% higher at 79,410 yuan ($10,962) per metric ton, reaching an intraday high of 79,470 yuan—its highest level since September 30.
According to analysts at ANZ, fundamentals in the copper market are showing signs of improvement, with their Downstream Copper Demand Indicator reflecting positive growth, particularly in grid infrastructure and electric vehicles. Recent stimulus measures have supported manufacturers, leading to an increase in production, while copper cathode inventories in Shanghai and Guangdong have declined due to reduced imports.
Refined copper output in China is expected to decline in April as more smelters begin equipment maintenance and some reduce capacity utilization due to financial losses, according to analysts at First Futures.
Copper cathode production among surveyed smelters rose 5.28% year-on-year to 1.9 million tons in January-February, according to Antaike, a state-backed research agency. March output is projected to grow by 4.32% year-on-year to 969,000 tons.
China remains the world’s largest consumer of copper, accounting for about half of global supply. However, concerns over a potential global trade war have limited price gains, ANZ analysts noted.
