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1) Copper prices surged to nearly a six-week high due to upbeat industrial production data from China, a major consumer, but faced limitations from a weakened property sector in the country and a stronger dollar. The London Metal Exchange's (LME) benchmark copper reached $8,268 per metric ton, marking a 0.4% increase from earlier, and hitting its highest price at $8,278 since October 2nd. China's industrial output rose 4.6% year-on-year in October, surpassing the expected 4.4% increase, marking the strongest growth since April. However, the property sector, despite government support, continues to lag, creating doubts about sustained demand. Additionally, the dollar's ascent impact's demand as it makes dollar-priced metals more expensive for holders of other currencies. Zinc also hit a near six-week high, reaching $2,664 per ton after breaching technical resistance at $2,605 and showed a 2.4% rise to $2,662. The zinc market is influenced by declining stocks in LME-approved warehouses, having dropped over 50% since September commencement. The substantial number of cancelled warrants, indicating zinc due to leave the LME system, is a significant factor. Other metals experienced moderate movements: aluminum rose 0.1% to $2,233, lead advanced 1% to $2,224 per, tin climbed 0.4% to $25,300 and nickel gained 0.3% to $17,525 per ton.
2) According to Wang Wei, head of copper trading at Shanghai Wooray Metals Group Co., the global copper market is expected to encounter an oversupply next year, potentially leading to further declines in copper prices. Despite an ongoing expansion in processing capacity, copper ore shipments from international mines are projected to be ample for Chinese smelters. Wang anticipates challenging conditions in the copper market for the coming year, aligning with the sentiments of local market observers. He foresees the market being at the most "loosest" in 2024 due to oversupply, although factors like Chinese stimulus measures and ore reserve depletion might tighten conditions in the long run. This view contrasts with some bullish expectation from others, like Goldman Sachs, which anticipates increased demand linked to the global energy transition. The copper market, after an initial rally in late 2022 and early 2023, has seen steady declines influenced by global monetary tightening and a slower-than-expected Chinese economy recovery. While some sectors like China's power grids and electric vehicle industry show promise for copper demand, weakness persists in the country's property sector. Wang expects a shift in China's refined copper market from a tight balance this year to a surplus of 600,000 tons in 2024 due to additional processing capacity. He also highlighted the rise in copper scrap supplies in China as an essential aspect to watch, especially as the life cycle of white goods used by the expanding middle class nears its end, potentially impacting long-term supply dynamics. Despite refraining from specific price forecasts, Wang suggested that any rise in Chinese copper prices might prompt short-selling activities.