Copper prices rebounded in futures and spot markets on September 16, with spot premiums in China surging after the futures contract rollover. While macro disruptions will cause short-term price fluctuations, the fundamentals stay strong on tight raw material supply and robust demand, supporting long-term prices.
The results of the Federal Reserve's policy meeting, released in early September 17 Beijing time, showed a unanimous vote to raise interest rates by 25 basis points, lifting the target range for the federal funds rate to 3.75%-4.00%. This marks the first rate increase in three years. The meeting also signaled that the policy stance may remain hawkish going forward, which could put pressure on U.S. dollar-denominated copper prices.
China's refined copper spot trading dropped on September 16, with copper prices rising and premiums surging due to tight available supply and futures contract rollover. Scrap trading also declined amid frequent fluctuations in prices. Approaching the Mid-Autumn Festival and China's National Day holidays, downstream enterprises are expected to stockpile raw materials in advance to ensure holiday operations, though actual demand releases need close attention.
Trading in China's copper semis markets stayed generally mediocre on September 16. In the copper rod market, end-users had actively restocked during the previous price declines, staying cautious when copper prices and premiums rebounded after the contract rollover. Large wire and cable enterprises have begun pre-holiday stockpiling, while small and medium-sized enterprises continued to purchase primarily based on needs. Other copper semis markets also remained largely cautious in transactions, awaiting stabilization in raw material prices.
