Copper Rallies as Chinese Buyers Return to Market

Copper prices surged on Thursday as Chinese buyers returned to the market after a recent selloff, driven by strong physical demand and a softer US dollar.

Benchmark copper on the London Metal Exchange rose 1.6% to $14,456 a metric tonne at 1328 GMT, rebounding from a 4% drop since hitting a record high of $14,875 a tonne on September 10.

The dollar's decline made dollar-priced metals cheaper for holders of other currencies, boosting demand. Alastair Munro, senior base metals strategist at Marex, noted that Chinese demand was real physical buying, not just speculation.

Chinese buyers' return to the market is reflected in the Yangshan copper premium, which rose to $118 a tonne on Wednesday, its highest since October 2022. Domestic physical market premiums also climbed to 645 yuan a tonne on Wednesday, their highest since December 2023.