Copper prices on course for second weekly gain, as Kwacha extends rally

Copper prices were on course for a second consecutive weekly gain, rising by nearly three percent, as easing trade pressures and the return of Chinese investors after the Lunar New Year helped offset weaker physical demand signals, market analysts say.

Sentiment in the base metals complex was lifted after the United States implemented a new global import tariff regime that imposed a relatively lower 10 percent rate on China compared with earlier levies, according to the Access Bank group market commentary.

“The softer stance towards Beijing provided some relief to markets, particularly after Chinese investors returned from the holiday break,” the report stated.

However, underlying fundamentals remained less supportive.

Inventories held in London Metal Exchange warehouses have almost doubled since mid-January, reaching their highest level since March last year.

At the same time, Chinese copper stockpiles have climbed to their highest levels since early 2020, as fabricators delayed restarting operations following the Lunar New Year.

After a speculative surge pushed prices to record highs in late January, copper now appears to be entering a consolidation phase.

Analysts caution that rising global inventories could cap further near-term gains, even as other base metals recorded mixed performances during the week.

On the domestic front, the Zambian Kwacha extended its rally against the US dollar for a second straight session on Thursday, supported by improved hard-currency inflows.

Data from Bloomberg showed the Kwacha appreciating by 0.35 percent to close at around K18.80 per dollar.

February has so far been another strong month for the local currency, which is up nearly five percent month-to-date and is on track to post its third consecutive monthly gain.

Analysts attribute the currency’s resilience to robust copper export receipts and ongoing measures aimed at reducing dollar usage in the domestic economy.

WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.