LONDON: Copper prices hit their highest in almost two years on Friday as funds extended a buying spree on supply concerns, while nickel jumped on talk of Chinese government purchases for stockpiles.

Three-month copper on the London Metal Exchange (LME) was up 1.4% at $9,866 a metric ton at 1610 GMT, after touching $9,913.50 for its highest since April 2022.

The metal used in power and construction is up 16% over the past two months. “The major themes remain the same. April has seen broad money inflows into the commodity space,” said Alastair Munro, senior base metals strategist at broker Marex.

A Citi note said the bank’s base case scenario now projects copper prices of up to $10,500 a ton while averaging $10,000 in the second and the third quarters.

“On the balance of risks, we now see the present rally continuing over the coming three months,” it added.

LME nickel jumped as much as 5% to $19,480 a ton, before paring gains to $19,300, due to worries about tighter supplies from top exporter Indonesia and market talk the Chinese government was buying for its stockpiles.

A nickel industry source said the state stockpiler was seeking 200,000 metric tons of nickel pig iron, or 20,000 tons of refined metal. LME aluminium advanced 1.7% to $2,660 a ton as the market adapted to moves by Washington and London to prohibit the LME and Chicago Mercantile Exchange (CME) from accepting new Russia-made aluminium, copper and nickel to exchange warehouses.

LME daily data showed more investor notifications of their desire to remove metal from LME-registered warehouses. This cut available LME aluminium stocks by 43,075 tons to 171,200, representing the weakest level since August 2022. LME tin surged 4.5% to a 22-month high of $35,505 a ton, extending sharp gains this week on a large position taken by one party, fund buying and worries about supply.

Zinc climbed 1.6% to $2,856 a ton and lead gained 1.7% to $2,217.50.