Copper prices rose on Tuesday, supported by a decline in oil prices and a recovery in technology company stocks, in addition to continued tight supplies in China, the largest consumer of the metal in the world.
The three-month standard copper price on the London Metal Exchange increased by 0.31 percent to $13,939 per ton, by 03:00 GMT. The most traded copper contract on the Shanghai Futures Exchange rose 0.14 percent to 107,700 yuan ($16,140) per ton, according to Reuters.
Buyers in China are facing record premiums, amid shortages of copper concentrates and refined copper inventories.
Customs data released on Tuesday showed that China's copper concentrate imports fell by 11 percent in October compared to the same period last year, with smelters coming under pressure from sharp declines in processing fees and sulfuric acid prices.
Copper stocks in warehouses monitored by the Shanghai Futures Exchange amounted to only 33,848 tons on Friday, while the “Yangshan premium,” which is an indicator of Chinese demand for imported copper, rose to a new record level of $230 per ton on Monday.
In financial markets, Wall Street and the global stock index recorded broad rises on Monday, as investors reassessed the wave of decline that affected technology stocks following the US midterm elections.
Sandeep Daga, head of research at the Metals Intelligence Center, said that the recovery in technology stocks and the narrowing of price spreads for nearby contracts “surprised investors who bet on falling prices.” The difference between the cash price of copper and the three-month contract on the London Metal Exchange last traded at $175.39 per ton, in the case of a “backorder” (inverse market), which indicates a scarcity of supplies available for immediate delivery.
For his part, Daniel Haynes, chief commodities strategist at ANZ Bank, said in a note that hopes for a de-escalation in the Middle East conflict pushed oil prices down, which enhanced risk appetite in the markets and contributed to supporting copper prices.
US President Donald Trump had taken a more conciliatory tone regarding Iran, following the major losses suffered by the Republican Party in the midterm elections, and acknowledged that the war with Iran had contributed to that defeat. The conflict in the Middle East has put pressure on the prices of metals linked to economic growth, such as copper, through its negative impact on the global economic outlook.
In the rest of the metals, aluminum fell on the London Metal Exchange by 0.31 percent, while zinc rose by 0.51 percent, lead by 0.13 percent, nickel by 0.18 percent, and tin by 0.1 percent.
On the Shanghai Stock Exchange, aluminum fell by 1.06 percent, zinc by 0.18 percent, and lead by 0.4 percent, while nickel rose by 0.14 percent, and tin rose by 0.11 percent.
Lucid, the American electric car manufacturer, announced an increase in loan facilities provided by the Saudi Public Investment Fund, its largest shareholder, by $1.75 billion, in a move that strengthens its financing capacity during the phase of restructuring operations and improving performance, and provides it with the necessary liquidity until the last quarter of 2027, according to Reuters.
The company said, on Monday, that the increase in term loan facilities, which allows the withdrawal of financing when needed, raises the liquidity available to it on a hypothetical basis to $3.75 billion, which enhances the ability of its new CEO, Silvio Napoli, to implement the recovery plan, in light of the weak demand facing the electric car sector in general after the end of the federal tax exemption in the United States last year.
Lucid expects that the available liquidity will be sufficient to continue its operations until the start of production of its medium-sized car in the second half of 2027, while it said that it will reveal its production guidance for 2027 and its medium-term plan in conjunction with the announcement of the end-of-year results.
The move comes at a time when the company is working to reduce cash spending and improve operational efficiency. It reduced cash outflows during the third quarter to $1.04 billion, compared to $1.48 billion in the previous quarter, by reducing production, including canceling the second shift at its factory in Arizona, in addition to reducing inventory and operational costs.
Chief Financial Officer Alexander De Bock said that these measures have begun to be reflected in the results, noting that the consumption of free cash flows decreased by 30 percent on a quarterly basis during the third quarter.
The company added that the number of its employees declined by about 28 percent between the first and third quarters, and that it achieved $800 million of the total targeted improvements in cash flows, amounting to $1.4 billion during the current year, by reducing inventory, operational costs, and capital spending.
The transformation plan also includes reorganizing the administrative structure, reducing administrative levels, and linking incentives to four priority projects. New officials for technology, finance, customer affairs and corporate transformation also joined the company at the beginning of the third quarter.
The movement of loaded liquefied natural gas tankers departing through the Strait of Hormuz recorded its highest monthly levels during October since the outbreak of the US-Iranian war last February, in an indication of a gradual improvement in the movement of gas exports from the Gulf, despite the continued restrictions and disturbances that affected navigation in the vital sea lane.
Ship tracking data issued by S&P Global Energy showed that 31 tankers loaded with liquefied natural gas crossed the strait during October, compared to 23 tankers in September. The shipments included 23 tankers loaded at the Qatari port of Ras Laffan, and eight tankers from Das Island in the Emirates.
Eric Yip, senior analyst at S&P Global Energy, said that UAE transit traffic has returned to pre-war levels, while Qatar has restored more than 30 percent of pre-conflict transit levels.
In another reading of shipping movement, Kpler data showed an increase in the number of LNG shipments loaded during October to 42 shipments, compared to 27 shipments in September. Loading operations in Ras Laffan also reached 35 shipments, with a tonnage exceeding 2.7 million tons, which is the highest level since the outbreak of the war, although it remains much lower than Qatar’s exports, which approached 6.2 million tons in February.
Shipping movement also witnessed the use of gas transfers from one ship to another off the coast of the Sultanate of Oman, an indication that companies are resorting to alternative logistical arrangements to facilitate the arrival of shipments to their destinations.
Kepler data showed that two tankers left Ras Laffan through the strait and carried out ship-to-ship transfers off the Al-Makhtaf area in Sohar. The tanker "SC Prestige" transferred its cargo to "BWNN Crystal Sky", which is currently heading to South Korea.
The tanker "Al-Mafeer" also transferred its cargo to the tankers "Shandong Redwood" and "Ijnan", which delivered the shipments to Pakistan.
On the other hand, exports from the UAE’s Das Island remained stable at seven loadings during October, unchanged from September, according to Kpler data.
