Copper surged to a fresh record, extending a months-long rally driven by financial investors who have piled into the market in anticipation of supply shortages.
Copper futures on the London Metal Exchange jumped as much as 1.7% to $10,848 a ton, exceeding the previous record set in March 2022.
The record in the benchmark London contract also comes as the global copper world is being roiled by a massive squeeze in the New York market, where prices set an all-time high last week. The short squeeze drove prices on the Comex exchange to an unprecedented premium over the LME and has triggered a rush to reroute metal supplies to the US.
LME copper has risen by more than a quarter since the start of this year, after a sudden tightening in ore supply raised the prospect that the global market may face a long-promised shortfall earlier than expected if smelters respond by reducing output of refined metal.
A series of setbacks at major mines in recent months prompted a wave of buying by investors, even as many participants in the physical copper trade have warned that the market was running ahead of reality. Demand remains relatively tepid — especially in top buyer China, where inventory levels remain high.
However, the supply disruptions and sustained price rally have emboldened copper bulls while drawing financial investors into the market in a bet on further gains.
For several years, a chorus of investors, traders and mining executives have been warning about a looming deficit that could drive prices sharply higher, driven by soaring demand for the energy transition while new mine supply is limited.
Source: MoneyControl