Copper sprints to record high as investors fear missing out

PUBLISHED: Mon, 10 May 2021 16:22:16 GMT
Eric Onstad

LONDON, May 10 (Reuters) – Copper raced to a new record peak on Monday as investors worried about missing out on further gains while some industrial users bit the bullet after waiting for lower prices.

Three-month copper on the London Metal Exchange climbed to an all-time high of $10,747.50 a tonne after first breaking through a decade-old record on Friday.

It pared gains and advanced 2.9% to $10,720 a tonne in official trading.

“Momentum is king, it’s a hot potato right now, and a lot of investors are looking at the market with despair if they’re not involved and they’re looking to get involved,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Speculators were gunning for the next round number and targeting $11,000, while some physical users who had been waiting for lower prices were throwing in the towel, he added.

“A buyers’ strike can only work for so long, so at some point you just have to capitulate and get back into the market.”

Copper also hit a record high on the Shanghai Futures Exchange as the most-traded June copper contract closed up 4.8% to 77,720 yuan ($12,094.62) a tonne.

Bullish investors bet that demand for copper will increase further as the world economy recovers from COVID-19 and as investments into green energy sectors ramp up, while prices were also supported by tight supply in the concentrate market.

  • A group of 15 key copper smelters in China have agreed to cut their purchases of raw material copper concentrate in 2021 by 8.8% year-on-year, state-backed research house Antaike said.
  • Base metals also got impetus from the Chinese ferrous market, where benchmark iron ore and steel futures hit all-time highs amid robust demand and supply concerns.
  • Other LME metals touched fresh peaks – aluminium and zinc hit the highest in around three years while lead rose to the strongest since October 2019.

LME aluminium climbed 1.5% to $2,577 a tonne, zinc climbed 1.2% to $3,052.50, lead gained 0.3% to $2,244, tin added 0.3% to $29,912 while nickel edged up 0.1% to $18,099.

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($1 = 6.4260 yuan)

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