KEY POINTS
- Copper prices surpassed $10,000 per tonne following China’s real estate stimulus.
- China’s Politburo introduced new rate cuts and a potential $142 billion capital injection.
- Mining stocks surged, with major companies like Glencore, BHP, and Freeport-McMoRan seeing significant gains.
Copper prices surged above $10,000 per tonne on Thursday, propelled by fresh stimulus measures from China aimed at stabilizing its struggling real estate market. Copper for December delivery rose 3.4 percent, reaching $4.64 per pound ($10,208 per tonne) in early morning trading on the Comex exchange in New York.
The rally followed a report by China’s official Xinhua News Agency, which highlighted the country’s Politburo plans for “forceful” rate cuts to support the property sector. In addition, China is reportedly considering a $142 billion capital injection into its largest state banks, further boosting market confidence.
China’s economic push
This latest stimulus package, the largest since the pandemic, was introduced to help lift China’s economy out of deflation and push it toward its growth target. China’s focus on reviving the real estate market has bolstered sentiment across global markets, given the sector’s significant demand for copper in construction and infrastructure projects.
According to Mining.com, the copper market also responded positively to reports of a stronger-than-expected U.S. economic rebound, adding to the optimistic outlook for base metals.
Despite the recent rally, analysts remain cautious about potential policy risks in the U.S., including concerns over a softening labor market, uncertainty surrounding the upcoming presidential election, and challenges in the manufacturing sector. These factors could influence the overall recovery of global demand for copper and other base metals.
Bank of America (BofA) had previously forecast that copper prices would surpass $10,000 per tonne by 2025, driven by high demand, constrained supply, and increased investment in energy transition projects. The bank expects manufacturing activity to stabilize as the Federal Reserve cuts interest rates, maintaining a positive outlook for copper through 2025.
The surge in copper prices also lifted mining stocks. Major players like Glencore saw shares rise as much as 5.8 percent in London, while BHP gained 4.8 percent. In New York, Freeport-McMoRan experienced a significant 7.5 percent increase in stock value.
