Copper prices rose by 0.5% to settle at 818.85, buoyed by China's central bank lowering its benchmark lending rates to record lows. The People’s Bank of China cut its one- and five-year loan prime rates by 25 basis points, to 3.1% and 3.6%, respectively, which boosted optimism about the economic outlook in the world’s top copper consumer. Additionally, the PBOC indicated potential further support for the Chinese economy by possibly lowering banks’ reserve requirements before the year ends. This follows better-than-expected Chinese economic data last week, further supporting market sentiment.
On the supply side, concerns persist over copper availability as demand for the metal continues to rise, driven by the global shift toward cleaner energy. In contrast, miners are struggling to increase production to meet this growing demand. China's imports of unwrought copper rose by 15.4% in September from the previous month, reflecting improving seasonal demand and a better consumption outlook. Globally, the refined copper market showed a surplus of 54,000 metric tons in August, compared to a 73,000 metric ton surplus in July, according to the International Copper Study Group (ICSG). Despite this, copper inventories in Shanghai Futures Exchange warehouses increased by 7.6% from the previous week.
Technically, copper is under a short covering, with open interest dropping by -9.64% to 5,724 contracts. The price increase of 4.05 reflects strong market momentum, with support at 815.3 and a potential test of 811.6. On the upside, resistance is expected at 822.1, and a move above this level could push prices toward 825.2.