Chinese copper futures strengthened Wednesday, supported by a weaker US dollar and a drop in Spanish and Italian bond yields.
The most traded copper contract on the Shanghai Futures Exchange (SHFE) rose 0.44 percent Wednesday to close at 54,910 yuan ($8,632.59) per ton. The October contract opened 0.7 percent above Tuesday's closing price, trailing a 1.1 percent overnight jump in the three-month copper future on the London Metal Exchange (LME).
Copper prices rose late Tuesday as the yield on Spain's 10-year government bond fell to 7.03 percent. The yield continued to drop early Wednesday, falling below the 7 percent line, where it is considered too expensive to borrow on the international financial market.
Still, Wednesday's rise may have more to do with the market's optimism about additional stimulus from the US Federal Reserve than confidence about the eurozone.
The US central bank began its monthly Open Market Committee meeting after the Chinese mainland markets closed Wednesday.
"Expectations are high about further stimulus from the Fed, but if they come up with nothing new or only take minor actions, then the market could be quite disappointed. (Base metals) prices could come under pressure after the statement," Daniel Briesemann, an analyst at Commerzbank, told Reuters Wednesday.
