Copper prices resume climb towards $10,000/t
- Benchmark three-month copper on the London Metal Exchange (LME) had risen 1.4% to $9,958.50 per tonne in official trades. On Thursday, prices hit $10,008 a tonne which was the highest since Feb. 2011.
- "It's a tremendously positive story for copper at the moment and in the long term," said WisdomTree analyst Nitesh Shah, adding that the metal will likely pierce through the $10,000 mark again.
LONDON: Copper prices climbed back towards $10,000 per tonne on Tuesday, supported by prospects for higher demand while inventories dwindle.
Benchmark three-month copper on the London Metal Exchange (LME) had risen 1.4% to $9,958.50 per tonne in official trades. On Thursday, prices hit $10,008 a tonne which was the highest since Feb. 2011.
"It's a tremendously positive story for copper at the moment and in the long term," said WisdomTree analyst Nitesh Shah, adding that the metal will likely pierce through the $10,000 mark again.
He cited demand increases from electrification and planned government spending in the world's largest economies.
"Over the next few years we are likely to see copper demand increase and that will support prices."
INVENTORIES: Copper stocks in LME-approved warehouses shed 6,325 tonnes to a five-week low of 137,000 tonnes, having lost 20% from the middle of April.
In warehouses monitored by the Shanghai Futures Exchange, weekly data on Friday showed stocks fell 1.3% compared to the previous week.
PRICE JUMP: Copper could spike to $13,000 a tonne in coming months, partially over low inventories, analysts at Bank of America said in a note.
SPREADS: The premium for cash copper over the three-month price was at about $4 a tonne, fuelling concerns over supply for immediate delivery.
SURPLUS: The International Copper Study Group (ICSG) said the global copper market should see a surplus of 79,000 tonnes this year and of 109,000 tonnes in 2022, as demand eases and supply rises.
"This assessment of the ICSG contrasts sharply with those of many other market participants, who envisage another seriously undersupplied copper market this year," analysts at Commerzbank said.
POSITIONING: Speculators are betting on copper prices climbing further, with the net long rising levels not seen since 2017 at 35% of open interest, according to brokerage Marex Spectron.
OTHER PRICES: LME aluminium rose 1.3% to $2,428 after touching a fresh three-year high, zinc gained 1.5% to $2,975, after hitting its highest since June 2018.
Lead added 1.3% to $2,179.50 a tonne, tin advanced 1.1% to $29,004 while nickel climbed 1.2% to $17,885.
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