Fed Hike Clears Uncertainty as Copper Prices Rise on Strong China Demand

Copper prices rose on Monday as the US Federal Reserve's interest rate hike cleared uncertainty in the market, analysts said. The benchmark three-month copper price on the London Metal Exchange increased by 0.06% to $14,530.5 a metric ton.

This is copper's highest price since September 10, when it reached $14,875 per ton. Strong demand from China continues to support prices, with the Yangshan copper gauge finishing last week at $124 a ton, its highest in nearly four years.

Expectations of inventory replenishment ahead of next week's National Day holiday in China also contributed to the price increase. Despite the Fed hike, which can typically weigh on growth-dependent commodities like copper, analysts from Chinese broker Everbright Futures said that extreme mine-side tightness and ultra-low Chinese domestic inventories still form a floor.