Copper topped $10,000 a metric ton for the first time since 2011, nearing the all-time high set that year as rebounding economies stoke demand and mines struggle to keep up.
Prices rose as much as 1.3% to $10,008 a ton on the London Metal Exchange, before slipping back to trade near unchanged, reports Bloomberg.The metal hit a record $10,190 in February 2011.
Copper has been among the best performers in a month where metals ranging from aluminum to iron ore have surged to the highest in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the virus pandemic. A push toward cleaner energy sources is also seen boosting consumption of copper, used in everything from electric vehicles to solar power systems, further straining supplies.
“This is a remarkable run for copper in terms of magnitude and consistency,” said Tai Wong, head of metals derivatives trading at BMO Capital Markets. “The all-time high at $10,190 is just around corner and now practically a foregone conclusion.”
Investors have piled into copper, with aggregate open interest in Shanghai Futures Exchange copper contracts at the highest in more than a year and hedge fund managers boosting bullish Comex copper bets in the week ended April 20.
With copper demand set to soar once more, there are mounting concerns that producers will struggle to plug the gap as they battle a host of technical and regulatory pressures. In the longer term, producers worry that plans to boost mining royalties could stifle investment.
Prices have doubled from lows in March, along with a surge across raw materials from oil to agriculture. That’s spurring debate about whether the current boom may herald a so-called commodities supercycle. It has also helped push mining shares to multiyear highs.
Copper pared earlier gains as the dollar gained, reducing the appeal of the metal for investors holding other currencies.
“The copper rally still has legs to go,” said Wenyu Yao, senior commodities strategist at ING Bank. “The outlook for the U.S. economy keeps getting better. Economic reopening coupled with massive stimulus, faster-than-expected vaccine rollouts and supportive fundamentals all point to even higher prices.”
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