Copper prices surge to two-month highs on the back of China’s stimulus, supply concerns

Copper prices have continued their upward trend, reaching more than two-month highs, driven by positive sentiment following China’s economic stimulus and declining inventories.

Signs of improving demand further supported the rally.

According to Absa Bank’s daily market update, copper prices hit a session high of US$9,913, their highest level since July 15.

“Three-month copper on the London Metal Exchange rose by 0.4 percent to US$9,833.50 per metric tonne,” the report stated.

Meanwhile, oil prices declined on Wednesday as investors reassessed whether China’s stimulus plans would be enough to boost the economy and drive significant fuel demand growth.

Brent crude futures fell by 17 cents, or 0.2 percent, to US$75 per barrel, while U.S. West Texas Intermediate crude dropped 24 cents, or 0.3 percent, to US$71.32 per barrel.

Prices had risen by 1.7 percent on Tuesday after China introduced its most aggressive economic stimulus measures since the COVID-19 pandemic, including interest rate cuts and government funding.

In Zambia, the Kwacha bounced back from a week-long low against the U.S. dollar during a volatile trading session on Wednesday.

The local currency opened weaker but recovered some losses, supported by healthy month-end supply from corporate players and other market participants.

“At market open, the Kwacha’s interbank bid-offer was quoted at K26.550/26.600, where it traded for most of the session.

However, it gained 20 ngwee in the afternoon to close at K26.350/26.400 on the bid and offer,” according to Absa Bank. The report noted that the Kwacha is expected to maintain a stable trajectory in the near term, subject to market forces.

Access Bank’s daily market update also showed that the USD/ZMW pair closed weaker on Wednesday.

Bloomberg data indicated that the pair fell by 0.46 percent, closing just above the K26.400 mark, supported by improved foreign exchange supply.

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