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Copper prices surged by 6.63% in September, driven by China's economic stimulus and tightening supply. On the MCX, copper traded near ?860, while COMEX futures hit $4.6 per pound. China’s central bank slashed interest rates, improving market sentiment, while LME copper rose above $10,000 per ton. Despite recent gains, analysts expect short-term consolidation but project long-term growth driven by green energy demand. Supply remains constrained, creating an imbalance as global demand rises, especially from the renewable energy and digital sectors.

Key Highlights

* MCX Copper surged 6.63% in September to ?860.

* China’s stimulus measures lifted market sentiment.

* LME copper crossed $10,000/ton due to global demand.

* Supply constraints could drive long-term price growth.

* Prices will continue their rebound due to these supply shortages.

In September, copper prices on the MCX rose 6.63%, trading close to ?860 as global economic conditions supported its rally. COMEX copper futures were similarly strong, trading around $4.6 per pound, while LME prices surged past $10,000 per ton, marking the strongest gains since early June.

China, the world's largest copper consumer, was a major catalyst for this surge. The People’s Bank of China cut the reserve requirement ratio by 50 basis points and implemented additional rate cuts, freeing up liquidity to boost economic growth. These actions, along with property sector support, drove market optimism, particularly as China prepares for its national holiday in October, which traditionally bolsters copper demand.

Meanwhile, tightening supply and dwindling inventories in Shanghai added to the bullish sentiment. Jefferies analysts reported that stockpiles had fallen by more than 20,000 metric tons, indicating that manufacturers are restocking and demand is picking up. Analysts at Citic Futures project that copper prices will continue their rebound in the near term due to these supply shortages.

Looking ahead, market participants remain optimistic about copper's long-term trajectory, driven by green energy demands and data center growth. However, market participants caution that the rally may experience short-term consolidation as traders take profits before resuming its upward trend.

Finally

While copper may face short-term corrections, its long-term outlook remains bullish due to supply constraints and growing demand from renewable energy and digital industries.

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