FX.co ★ Copper Rebounds on Short Covering

Copper futures surged to approximately $5.40 per pound on Monday, making a notable recovery following last week's decline. This price increase was driven by short covering and the shifting of positions as contract expirations neared, outweighing the impact of disappointing economic data from China. Recent statistics indicate a subdued demand in China, characterized by decelerating industrial output, lackluster retail sales, and a continued drop in new home prices, with ongoing challenges for developer Vanke highlighting persistent risks in the property sector. Nevertheless, copper prices continue to hover around their highest levels in several months. This resilience is supported by tight market conditions, low visible inventories in London, and limited global supply. Furthermore, a significant portion of London Metal Exchange (LME) stocks has been allocated for delivery, and material is continuing to move into the US to take advantage of arbitrage opportunities.