Copper jumped to its highest price in almost a decade as the global recovery from the pandemic extended a rally in metals markets, strengthening investors’ optimism for an improvement in global demand amid towering investments in green energy.
Three-month copper on the London Metal Exchange (LME) hit $9,750 per tonne, up 2.1 per cent, its highest since September 2011.
Reacting to the price surge of the metal often regarded as a bellwether for the global economy, Zhu Yi, an analyst with Bloomberg Intelligence, said global demand is recovering, led by China as well as the green transition gradually taking effect globally is bolstering sentiment further, adding that demand will stay resilient, supply will struggle to satiate demand while upside momentum will continue its progression.
Industrial supply of the metal used in the production of electric vehicles and renewable energy is currently facing a supply squeeze as mining unions and port workers in Chile, world’s leading producer, threaten strike actions over pension savings withdrawal issues. This, analysts explained, has hindered downstream physical markets from purchasing the metal, further raising copper prices.
Copper’s integral role in the electronic sector is also triggering expectations for further gains as nations roll out more aggressive green energy projects to meet climate targets. Market analysts have also raised optimism that the metal is likely to top 2011’s record of $10,190 and surpass $15,000 in the coming decade as demand outstrips supply.