On Thursday, London copper surged past the $10,000 integer mark, Singapore iron ore futures reclaimed the 100 level, while spot silver prices reached a 12-year high!

Whether it's precious metals, industrial metals, or black commodities, a series of key integer levels and resistance levels were all broken this week: London copper surged past the $10,000 integer mark, Singapore iron ore futures reclaimed the 100 level, while spot silver prices reached a 12-year high!

Michael Cuoco, head of the Metals Division at StoneX Financial, stated that the Chinese government is trying to restore confidence in the economy and is sending positive signals to the market and the public.

Jakob Stausholm, CEO of Rio Tinto, pointed out in an interview, 'We have seen market conditions in the (metal) sector weaken for a while, but stimulus measures might help stabilize the market.'

The Central Political Bureau of the Communist Party of China held a meeting on September 26, analyzing and researching the current economic situation and deploying the next steps in economic work. The meeting emphasized the need to increase the countercyclical adjustment of fiscal and monetary policies, ensure necessary fiscal expenditures, effectively carry out grassroots 'three guarantees' work. Long-term special government bonds and local government special bonds should be issued and used well to better leverage the role of government investment. Lowering reserve requirement ratios and implementing meaningful interest rate cuts are also on the agenda. Efforts should be made to stabilize the real estate market.

On Friday (September 27), the People's Bank of China took further steps by announcing a 0.5 percentage point reserve requirement ratio cut and reducing the 7-day reverse repurchase operation rate by 20 basis points. The People's Bank of China stated that it will continue to adhere to a supportive monetary policy stance, increase the intensity of monetary policy regulation, enhance the precision of monetary policy regulation, and create a favorable monetary and financial environment for stable growth and high-quality development of the Chinese economy.

London copper 'breaks ten thousand'.

Market data shows that the three-month copper price on the London Metal Exchange (LME) broke through the psychological level of $10,000 per ton on Thursday, reaching as high as $10,090, the highest since June 7th. Many analysts believe that after China relaxed its monetary policy to boost the sluggish economy, the announcement of new fiscal stimulus measures on Thursday has greatly increased hopes of a metal demand recovery.

Fu Xiao, director of global commodity market strategy at Bank of China International, said: "Yesterday (Wednesday) some people were still unsure if fiscal stimulus policies would follow monetary easing policies, but today it happened. Therefore, in terms of China's supportive measures, everything is very positive. After the Fed rate cut, China has more room to implement supportive policies because the Renminbi has been quite strong."

Analyst Ji Xianfei from GTJA Futures also pointed out that before China announced favorable macroeconomic policies, the Fed had already cut rates by 50 basis points, and the expectation for a significant rate cut later this year remains strong, reflecting the Fed's strong determination to prevent an economic downturn, which helps to support long-term market risk appetite. China's favorable policies to support the real estate industry will help boost expectations for copper consumption in real estate. On the supply side, due to tight copper mine supply, tight concentrate supply, and the impact of smelter maintenance, China's refined copper production continues to be weaker than expected. Considering overall supply and demand, domestic social inventories may continue to deplete.

In addition to copper prices, prices of other major industrial metals on the LME also rose almost across the board on Thursday. LME aluminum futures rose by 3.1%, hitting the highest level since June 7th at $2,616.50 per ton; LME zinc futures surged by 3.4%, reaching the highest since May 30th at $3,098; and LME lead futures climbed by 1.9%, reaching $2,136.50.

This wave of industrial metals price hikes even led to a significant surge in global mining stocks. $Southern Copper (SCCO.US)$ rose more than 8%, $Freeport-McMoRan (FCX.US)$ up more than 7%.

Iron ore breaks through 100.

In the black sector, due to the rekindled confidence in the prospects of China's real estate, the price of iron ore, often dubbed the "crazy stone", surged to its highest level in over three weeks overnight.

Singapore iron ore futures prices rose to $101.25 per ton on Thursday, the highest level since September 2.

Analysts from ANZ Bank stated in a report that the rise in iron ore futures prices is due to market hopes that measures to support the real estate market in China will change its fate.

However, the institution also mentioned that although stimulus measures should prevent the deterioration of the steel market, they are unlikely to boost short-term demand as steel production this year is expected to be lower than in 2023.

Huatai Futures pointed out, "Driven by macro stimulus policies, the short-term upward trend of iron ore is strong, but the spot market remains cautious. If steel demand does not improve significantly, the supply and demand of iron ore will not reach a balance, and downside risks still exist."

Silver hits a 12-year high.

Boosted by China's economic stimulus measures, evidently not limited to just basic metals and black commodities, in the precious metals sector, the price of silver with stronger industrial properties has also been soaring.

The spot price of silver was around $32.03 per ounce at the end of trading on Thursday, reaching a high of $32.71, the highest since December 2012. Silver is both a safe-haven investment and a key raw material for industrial applications, with a year-to-date increase of over 35%.

Fu Xiao, Head of Global Commodity Market Strategy at Bank of China International, stated, "Silver is expected to continue to rise in the coming quarters due to consecutive rate cuts and possible sustained stimulus policies in China." She forecasts that silver prices will rise to the $37 level.

Aneeka, Director of Macroeconomic Research at WisdomTree, pointed out that one of the main catalysts for silver's rise is gold, as the two have a strong correlation. Gupta mentioned that the gold/silver ratio is decreasing with the rise in silver prices.

Editor/Somer