Copper leaps to 9-year high as China accelerates metals rally
- Other industrial metals also jumped, with aluminium at its highest since 2018, nickel its strongest since 2014, tin its strongest since 2012 and lead its highest since 2019.
- Benchmark copper on the London Metal Exchange (LME) was up 2.9% at $8,631 a tonne in official trading after touching $8,633. Prices are up around 10% this month.
LONDON: Copper surged nearly 3% to its highest since April 2012 on Thursday as Chinese investors returning from a week-long holiday added impetus to a rally that has almost doubled prices from lows at the height of coronavirus worries last March.
Other industrial metals also jumped, with aluminium at its highest since 2018, nickel its strongest since 2014, tin its strongest since 2012 and lead its highest since 2019.
Benchmark copper on the London Metal Exchange (LME) was up 2.9% at $8,631 a tonne in official trading after touching $8,633. Prices are up around 10% this month.
Its gains echoed action in China, where the most-traded copper contract on the Shanghai Futures Exchange rose as high as 63,290 yuan ($9,784) in heavy trading, up almost 6% and its highest since September 2011.
Underpinning the rally is resurgent demand in China, the biggest metals consumer, expectations of tight supply and a rush of speculative investment, with many analysts predicting a multi-year bull run.
But the market may be moving too fast, said analysts at Commerzbank.
"No new data is available to underpin the pronounced rise in metals prices, particularly in the last few weeks," they said. "Metals prices are currently being driven to a large extent by speculation, and the upswing is beginning to look excessive."
STOCKS/SPREAD: Copper inventories in LME-registered warehouses at 76,025 tonnes are near their lowest since 2005 and the premium for cash copper over three month metal is rising, suggesting tight nearby supply.
DOLLAR: The dollar was weaker, helping metals by making them cheaper for buyers outside the United States.
OTHER METALS: LME aluminium was up 2.2% at $2,161 a tonne after reaching $2,167, the highest since October 2018. Nickel rose 1.3% to $19,003 after touching $19,170, the most since September 2014.
Tin was up 2.8% at $25,240 a tonne having reached its highest since February 2012 at $25,470. Lead was 1.7% higher at $2,146.50 after reaching $2,149, its most valuable since November 2019.
Zinc rose 1.5% to $2,859.50.
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