Copper prices may retest the $10,000/tonne mark in the coming weeks due to investor optimism over policy support in China, according to analysts from Citigroup.

The world’s biggest consumer is widely anticipated to introduce further stimulus to upgrade its renewable energy infrastructure at the Third Plenum meeting in mid-July.

These additional measures, specifically targeting domestic property and grid investments, are expected to support copper prices in the near term, Citi analysts said in a note.

The bank also noted that the recent pullback in copper is mainly due to weaker manufacturing data globally, which it believes is only temporary.

While cyclical demand might have softened in June, the overall copper consumption for the first half of 2024 remains robust at around 4% year-over-year growth, Citi said.

Longer term, the metal has a chance to rise even further and reach $12,000/tonne due to the onset of rate cuts in major economies.

US Federal Reserve Chair Jerome Powell said earlier this week that inflation is returning to a downward path, sparking market confidence about monetary easing.

By 11:20 a.m. ET, copper traded 2.2% higher at $9,938.71/tonne — its best in over a month. In May, it set a record high of around $11,000/tonne.