Copper Retreats as Disappointment Over Limited Chinese Fiscal Intervention Mounts

Friday saw the price of copper drop following disappointment over the support package announced by China to revive its economy. On the London Metal Exchange, three-month copper declined by 2.2% to reach $9,456 per metric ton. This came just a day after the red metal’s price rebounded by 3.4% the previous day.

China is a huge consumer of various metals, including copper, steel, and aluminum. Despite slowing its copper wire purchases this year, China through the State Grid Corporation of China, uses over one-quarter of copper produced globally in its electrical cables.

In addition to being the biggest consumer of refined copper, China is also the largest producer of refined copper. In 2023, China was the 3^rd biggest producer of copper at 1.7 million metric tons. The first two countries were Chile and Peru, producing 5.3 and 2.6 million metric tons respectively.

The fiscal stimulus measures announced last week by the Chinese government would alleviate debt repayment stress for local governments. It also pointed to additional stimulus for the struggling economy.

WisdomTree commodity strategist, Nitesh Shah, argued that the market was disappointed by the measures. Shah explained that more was expected from China given that the expectations had been set very high. One trader in Asia revealed that the markets had expected 12 trillion yuan ($1.66 trillion) and not the 6 trillion yuan ($834 billion) announced.

Worry from investors has increased following threats by incoming President Trump to impose strict tariffs on China, which many believe could negatively affect the demand for metals.

Ahead of China’s announcement, the most-traded December contract for the red metal on the Shanghai Futures Exchange closed 1.5% higher at $10,753 per ton. This is equivalent to 77,100 yuan.

Despite the decrease in prices, the loss was cushioned by data which showed that copper inventories in the Shanghai Futures Exchange warehouses had dropped by nearly 9%. This signals an improvement in demand.

Other metals also saw declines in their prices, with nickel on the London Metal Exchange hitting $16,355 per ton, representing a 1.4% decline. Despite the price drop, nickel inventories had extended their gains to more than 150,000 tons, their highest level in over 3 years.

Aluminum also saw its price reach $2,635 per ton, a 2.2% drop, while the price of tin dipped 0.5%, hitting $31,650 a ton. The price of lead per ton reached $2,031.50, a 0.3% decline. Additionally, zinc’s price per ton reached $2,990, representing a 2% drop.

Entities like First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) with interests in copper resource exploration are likely to keep tabs on the price movements of this metal to see how any shifts could affect their projections of value creation for shareholders.

NOTE TO INVESTORS: The latest news and updates relating to First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) are available in the company’s newsroom at https://ibn.fm/FSTTF

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