BEIJING- Shanghai copper prices rose on Wednesday to a seven-week high, with the demand outlook buoyed by China’s latest economic support and a subdued dollar amid expectations of an interest rate hike pause by the US Federal Reserve.
The most-traded July copper contract on the Shanghai Futures Exchange was up 1.4 percent at 67,920 yuan ($9,478.49) per metric ton by 0138 GMT, its highest since April 25.
China’s central bank’s decision to cut short-term borrowing costs for the first time in 10 months came as the latest move by the country to support its economy, signaling potentially a rise in demand for industrial metals.
Upbeat sentiment sent three-month copper on the London Metal Exchange to a one-month high in the previous session, while the contract retreated 0.1 percent to $8,448 per metric ton.
The dollar hovered around a three-week low on Wednesday, after the smallest annual increase in inflation last month in more than two years supported expectations that the Fed will pause rate hikes at its two-day meeting ending on Wednesday.
In China, refined copper output declined month-on-month in May because of smelters’ maintenance. That, coupled with lower imports due to unfavorable market conditions, raised concerns of further supply tightness.
