China, the world’s largest consumer of copper, is keeping prices of the metal from sinking to new lows.
Copper prices have been tanking since early 2012, amid China’s slowing economy and cases of alleged fraud in Chinese warehouses holding the metal early this year. But the secretive Chinese state agency charged with maintaining metals stockpiles has been quietly buying copper when prices dip, providing a floor of around $6,500 a metric ton, traders and analysts told the Wall Street Journal.
China’s State Reserve Bureau, which maintains stocks of metals such as copper and iron as strategic materials, stepped up copper buying to new heights this year, buying about 500,000 tons of copper since early January, the traders and analysts told the Journal.
There is no evidence that the bureau’s appetite has been satisfied and the copper purchases are expected to continue well into 2015, according to a Hong Kong-based trader at a metals trading firm.
Chinese bright copper scrap had the largest decline on Tuesday, November 18, dropping 3.3% and landing at CNY 41,300 ($6,744) per metric ton. At CNY 48,075 ($7,851) per metric ton, Chinese copper wire fell 0.5% on Tuesday. Chinese copper bar ended the day at CNY 48,820 ($7,972) per metric ton, after the 0.5% drop yesterday. The cash price of Chinese copper weakened by 0.5%, settling at CNY 49,020 ($8,005) per metric ton.
The cash price of primary Japanese copper increased 1.0% to JPY 817,000 ($7,004) per metric ton. The price of US copper producer grade 122 declined 0.3% to $3.75 per pound. The price of US copper producer grade 110 fell 0.3% to $3.75 per pound. The price of US copper producer grade 102 saw a 0.3% decline to $3.94 per pound.
On the LME, the primary copper cash price rose 0.9% to $6,751 per metric ton. Also on the LME, the copper 3-month price gained 0.8% to finish at $6,675 per metric ton.