Copper price leans bullish on China stimulus, firmer risk appetite

  • Copper price consolidates the biggest daily loss in over a week, grinds higher around monthly top.
  • China announces one more stimulus package to battle recession woes.
  • Hopes of less hawkish central bank speeches at the Jackson Hole also underpin firmer sentiment.

Copper price edge higher as stimulus from the world’s largest industrial player joins cautious optimism surrounding the Jackson Hole symposium to favor the bulls during early Thursday morning in Europe. Also keeping the red metal positive is a deficit in the global refined copper market, per the latest International Copper Study Group (ICSG) monthly bulletin, published the previous day.

That said, copper futures on COMEX printed 0.15% intraday gains near the $3.6445 level by the press time whereas the three-month copper on the London Metal Exchange (LME) was up 0.2% at $8,052 a tonne, as of 02:28 GMT, per Reuters. However, the most-traded September copper contract on the Shanghai Futures Exchange (SFE) lost 0.7% to 62,910 yuan ($9,178.72) a tonne at the latest as Chinese currency rises across the board.

China’s Cabinet, State Council, outlined a 19-point policy package on Wednesday while announcing economic stimulus measures worth CNY1 trillion ($146 billion) to stimulate growth affected by covid lockdowns and property market crisis, per Bloomberg. Even so, global rating giant Fitch mentioned that the Chinese land market has yet to recover in a sustainable manner. Previously, Reuters came out with the news suggesting that various Chinese state media agencies are coming to the rescue of the local currency, the yuan, after the recent depreciation, justifying that the country’s strong exports should offset a stronger dollar and hawkish Fed rate hikes.

The mixed US data and hopes that the global central bankers would refrain from comments suggesting aggressive rate hikes, mainly due to the looming recession fears, also seemed to have favored the copper buyers. On the same line was the latest ICSG bulletin that said, “The global refined copper market showed a 66,000 tonne deficit in June, compared with a 30,000 tonne deficit in May,” per Reuters.

While portraying the mood, the US 10-year Treasury yields remain sidelined around the two-month high near 3.10% but stocks in the Asia-Pacific region and S&P 500 Futures remain mildly bid by the press time.

Looking forward, the second version of the US Q2 GDP will join the US Personal Consumption Expenditure (PCE) for the said period to decorate the calendar. However, major attention will be given to Jackson Hole for fresh impulse.

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