Copper rises to decade high
By James Hester
15:36, 26 April 2021
Copper futures traded at the highest level in a decade on Monday as global recovery hopes and scarce supply pushed prices higher.
The metal reached $9,750 a tonne on the London Metal Exchange at one point on Monday, a 2% rise.
Some traders believe copper could reach as high as $15,000 a tonne as supply worries and the ongoing rollout of COVID-19 vaccines boost economic growth forecasts for 2021.
Copper fundamentals
More optimistic projections on global growth this year are feeding expectations of further strong demand from China. Meanwhile, US President Joe Biden’s plans to boost spending on infrastructure by $2tn has put additional upward pressure on prices. Recent dollar weakness is another factor supporting copper prices.
“We are in for a good run higher as we are having supply issues. Chilean port workers threatening to strike, which is a short-term issue, but will cause some trouble for shipments into China in an already tight concentrate market,” commodities broker Anna Stablum at Marex Spectron told Reuters.
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Green demand
In a report on copper released earlier this month, Goldman Sachs said the metal was on course for its strongest phase of volume growth in history this decade. It points to the metal’s role in mitigating climate change given its role in energy storage and renewable energy technologies.
“We estimate that by-mid decade this growth in green demand alone will match, and then quickly surpass, the incremental demand China generated during the 2000s. Ripple effects into non-green channels mean the 2020s are expected to be the strongest phase of volume growth in global copper demand in history,” said Goldman.
“I’m in pretty deep but FOMO added to some more this morning myself. I just keep thinking there is obviously a fundamental change occurring in the #copper market here. The EV transformational demand coming through and this is pre the infrastructure bill,” said one trader on Twitter on Monday.