Copper price hones in on $10,000 per ton as supply angst continues
Copper traded near $10,000 a ton, hitting a new two-year high on its way, as investors continue to pile in on a bet that miners will struggle to service a surge in demand for the bellwether industrial metal.
Base metals have posted broad gains in recent weeks, and copper opened Monday with a fresh advance to $9,988 a ton. Signs of improvement in manufacturing activity from the US to China have buoyed metals, although geopolitical risks and renewed uncertainty over monetary policy are clear risks.
Copper’s rally was fueled initially by a slew of disruptions at major mines that have left smelters rushing to find alternative supplies. Demand in China has been in a seasonal trough, but there are growing hopes that a tentative rebound in global manufacturing activity will help to shore up demand.
“The path forward from here will be data-dependent and led by individual metal fundamentals,” Citigroup Inc. analysts wrote in an emailed note. The copper outlook looks bullish in the next three months on the prospect of a tighter market and short covering, they said, while other metals have weaker physical fundamentals.
The rally has come even as investors contend with an apparent shift in the Federal Reserve’s path toward interest-rate cuts, with Chair Jerome Powell signaling last week that it’s going to take the bank “longer than expected” to be sure that inflation is under control.
In aluminum, orders to withdraw metal from Asian depots jumped for a fifth day, pushing the volume of stock that’s available to other buyers toward record lows. Glencore and Trafigura were involved in large orders to withdraw metal from the exchange last week, Bloomberg News reported Friday.
Copper climbed as much as 1.1% Monday to reach $9,988 a ton, before trading 0.2% lower at $9,861 at 3:53 p.m. local time. Other metals were flat to lower, with zinc falling 0.7% and tin down 2.4%.
