Benchmark copper leapt to its highest level in more than eight years on Monday, building on last week’s solid gains driven by expectations of stronger demand and tight supply.
Three-month copper on the London Metal Exchange CMCU3 had risen 0.8% to $8,398 a tonne by 0604 GMT, after earlier touching $8,406, its highest since September 2012.
However, light trading is likely to persist with markets in China, the world’s biggest metals consumer, closed for the Lunar New Year holiday until Feb. 17.
“With environmental policies accelerating the use of copper, we see the market remaining tight this year,” said Daniel Hynes, senior commodity strategist at ANZ, citing rising investments in renewable energy and electronic vehicles.
ANZ has set a 12-month target price of $9,000 a tonne for the metal often used as a gauge of global economic health.
China’s copper inventories have dropped to near-decade lows at a time when demand is supposed to be tepid because of the holiday. industrial metals also rose, further boosted by hopes of a massive U.S. coronavirus relief plan under the Biden administration. an aggressive stimulus may become more widespread with Treasury Secretary (Janet) Yellen urging G7 countries to ‘go big’ on fiscal support on Friday,” said National Australia Bank economist Tapas Strickland. Nickel CMNI3 rose as much as 1.2% to $18,785 a tonne, its loftiest since September 2019, on strong demand outlook for a key material in producing electronic vehicle batteries.
“Even as battery makers around the world look to invest in new capacity, mainland China will still be the largest producer of EV batteries by 2030, accounting for around two-thirds of total base case global manufacturing,” said Wood Mackenzie Asia Pacific Vice Chair Gavin Thompson.
* Tin CMSN3 advanced 0.6% to $23,795 a tonne, zinc CMZN3 gained 0.1% to $2,837 a tonne, lead CMPB3 rose 0.4% to $2,126 a tonne, aluminium CMAL3 added 0.1% to $2,092.50 a tonne.
Source: reuters
