Copper Climbs 1.2% as Chinese Traders Return, Chile Mine Strike Adds Support

Copper rose on Thursday as Chinese traders returned from a week-long holiday in a buying mood, lifting metals across the board. Futures on the London Metal Exchange gained as much as 1.2%, climbing immediately after China's main bourse opened.

Copper was up 1% at $14,617.50 a ton on the LME by 10:22 a.m. Singapore time. Zinc climbed 1.3% and aluminium added 0.7%. Iron ore futures in Singapore rose 0.5% to $91.95 a ton.

The week-long Chinese holiday had temporarily muted activity in Asian markets, so the return of the country's traders gave prices an immediate lift.

Chile strike threatens supply

Copper is also drawing support from a strike at a key mine in Chile. Two unions at Antofagasta Plc's Centinela project began action on Wednesday and said the walkout would start affecting production within about two weeks.

The operation has maintained feed to its processing plants, but much of its mine movement and development has stopped, the unions said. Antofagasta earlier said projected output remained unchanged.

Fed path and China demand in view

Traders are also watching the US Federal Reserve's interest rate path. Markets are pricing in a 20% chance of further tightening in October and an 80% chance in December. Higher borrowing costs typically curb investor demand for commodities, which bear no interest.

The red metal is still consolidating after rising to a record last month. That rally came on concerns that US tariffs on refined copper would lead to a rush of supplies to America and cause a squeeze elsewhere.

Crucial to the outlook now is demand from China, the world's biggest consumer, where recent data has pointed to industrial weakness.

What it means

Nigeria is not a copper producer, so the direct price effect on local mining earnings is limited. The bigger channel is cost. Nigerian manufacturers that import aluminium, zinc and copper-based inputs will feel any sustained rise in these metals, and a stronger dollar environment tied to Fed tightening would add pressure through exchange rates.