Possible stimulus measures set to have impact on copper futures

Chinese copper futures ended the week with a rise and are set to be strongly influenced by the possibility of stimulus measures that could be rolled out at the annual Central Economic Work Conference slated to be held this week.

The most-traded copper contract for February delivery on the Shanghai Futures Exchange (SHFE) jumped by 560 yuan ($91), or 1.23 percent, from Thursday, closing at 46,090 yuan per ton Friday. The price was down 120 yuan, or 0.26 percent, week-on-week.

The benchmark three-month copper contract on the London Metal Exchange (LME) lost 0.29 percent to close at $6,451 per ton Friday. The contract was up 1.62 percent on a weekly basis.

The bullish performance in the mainland stock markets lifted investor confidence in SHFE commodities last week. And with the annual Central Economic Work Conference to be held Tuesday, the market is widely expecting further stimulus policies to be announced during the meeting.

Nevertheless, concerns about demand still lingered in the market.

According to Nicholas Snowdon, a metal analyst at Standard Chartered, China's State Reserve Bureau has already bought 700,000 tons of copper this year and is likely to purchase an extra 200,000 tons over the next two months, Bloomberg reported Friday.

In overseas markets, LME copper posted a robust rebound Thursday after Mario Draghi, president of the European Central Bank, hinted at a possible purchase of sovereign bonds at a press conference.

However, the gains were not sustained on Friday partly due to a stronger dollar making commodities more expensive for holders of other currencies.