Market Outlook: Copper Rebounds on LME Amid Hopes for China's Stimulus

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Market Outlook: Copper Rebounds on LME Amid Hopes for China's Stimulus

Copper prices rebounded today after yesterday's drop triggered by sudden sell-offs following Donald Trump's victory in the U.S. presidential election. Expectations for further stimulus from China played a significant role in the recovery.

Three-month copper on the London Metal Exchange (LME) rose by 1.1% to $9,449 per ton at 07:23 GMT. The contract had fallen to its lowest level since September 18 at $9,302 per ton yesterday.

On the Shanghai Futures Exchange (SHFE), the December copper contract dropped by 1.4% to 76,370 yuan per ton ($10,644.35). Earlier in the session, it fell to 75,520 yuan per ton, the lowest level since September 23, following overnight losses in London.

One trader commented, "There are market expectations that China will increase stimulus measures to counteract the effects of Trump's proposed tariff plans on Chinese imports."

The U.S. Federal Reserve is expected to lower interest rates further this evening, which is likely to support economic growth and metal demand while weakening the dollar, making dollar-priced metals cheaper for holders of other currencies.

However, concerns have increased that Trump's victory may lead to a rollback of large electrification initiatives, reducing demand for metals, including copper, and potentially causing price swings due to impacts on the global metal supply-demand balance.

An analyst remarked, "I doubt the bulls will be interested in metals. Trump's anti-China, anti-green, and dollar-supportive policies will continue to pressure metals downward."

On the LME, aluminum traded up 0.8% at $2,635.50 per ton, nickel increased by 1.2% to $16,315 per ton, zinc rose 1.5% to $3,016.50 per ton, lead decreased by 0.2% to $2,044 per ton, and tin was up 0.8% at $31,610 per ton.

On the SHFE, aluminum increased by 1.7% to 21,425 yuan per ton, nickel rose by 0.9% to 127,050 yuan per ton, lead climbed by 1.2% to 16,880 yuan per ton, zinc remained nearly unchanged at 25,100 yuan per ton, and tin decreased by 0.9% to 260,380 yuan per ton.