Capital Market

China’s copper stockpiles shrink again in hint at demand upturn

China’s copper stockpiles shrink again in hint at demand upturn
Copper stockpiles in China, which have ballooned this year, continued to slide in a tentative sign that buyers are returning in the world’s biggest consumer of commodities.

Inventories of the industrial metal on the Shanghai Futures Exchange fell for the third straight week and are now at the lowest in more than a month.

The price of copper has retreated about 13% from last month’s record on concerns about increasing global inventories, profit-taking by investment funds and muted Chinese demand. That pullback may now be luring buyers back to the market.

Copper has been pulled in different directions by competing forces for much of this year. Bullish fund managers in London and New York have plowed tens of billions of dollars into copper with an eye to future shortages. But Chinese purchasers have been deterred by a weak property market and soaring prices.

Copper, along with other base metals, rose on Friday before the release of the Federal Reserve’s preferred gauge of underlying inflation. A low reading could benefit industrial commodities by paving the way for the US central bank to start cutting interest rates.

Metals have wavered in recent days — during a major London Metal Exchange event in Hong Kong — as traders mull an uncertain demand outlook marked by tepid global growth. Still, the LMEX Index of six base metals is on track for a fourth quarterly advance.

Copper rose 1.2% to $9,626.50 a ton in London by 11:44 a.m., snapping a five-day losing streak. All other base metals rose, with zinc gaining 1.2% to the highest in three weeks, while aluminum added 1.7%.

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