Recently, copper prices have continued to rise, rising for the fourth consecutive trading day. The rally was mainly supported by signs of recovery in Chinese demand, computer-driven fund purchases, and hopes of interest rate cuts, but also by a weaker US dollar.
Three-month copper on the London Metal Exchange rose 1% to $9,768 a tonne in official trading. Copper prices have fallen 12% since hitting an all-time high on May 20, but have rebounded strongly after hitting their lowest point in more than two months on Thursday.
The utilization rate of copper rod product manufacturing plants in China rose to 59% from 48% at the end of May, indicating an increase in demand in China. In addition, the most active August copper contract on the Shanghai Futures Exchange also rose 1.2%.
The rise in copper prices has also benefited from the intervention of algorithmic computer models that place orders based on momentum signals, driving prices higher. At the same time, a weaker dollar also provided support to copper prices, mainly due to a dovish stance from Federal Reserve Chair Jerome Powell, which led to a decline in US bond yields.
However, data on China's services sector activity showed that growth has slowed since June and new orders growth has also slowed, leading to a four-year low in market confidence, which has limited the upside in copper prices to some extent.
Among the other metals on the London Metal Exchange, aluminium, zinc, lead, nickel and tin prices all rose to varying degrees.
Overall, copper prices are currently affected by a number of factors, including Chinese demand, speculative buying and US dollar movements. Investors need to continue to pay attention to these factors to grasp the future direction of copper prices.