(Bloomberg) — Copper’s stunning rally toward its highest level since 2011 is showing no signs of abating, with bulls swarming in to profit as stimulus measures, vaccine rollouts and climate pledges fuel a global recovery from the pandemic.
Metals led by copper, a barometer of the global economy, are benefiting as the world’s largest economies announce stimulus programs and climate pledges as they rebuild from the coronavirus shock. Investor appetite is increasing, with aggregate open interest in SHFE copper at the highest in more than a year.
“Marco-economic data continues to point to strong demand conditions for copper,” Vivek Dhar, an analyst with Commonwealth Bank of Australia, wrote in a note, citing industrial output and manufacturing indexes across the globe.
Copper rose as much as 1.4% to $9,885 a ton on London Metal Exchange, the highest level since August 2011, before trading at $9,843 as of 12:59 p.m. in Shanghai. Prices hit an all-time high of $10,190 in February 2011. The metal surged as much as 2.2% to 72,510 yuan on Shanghai Futures Exchange, also the highest level in almost a decade. Other metals were broadly higher, with aluminum in London at a three-year high.
On the supply side, some Chilean port workers began scheduled protests against the government’s pandemic relief policies, threatening disruptions to output from the South American country, which accounts for about a quarter of the world’s copper supply.
Despite all the bullishness, near-term copper demand from China may weaken. The top user may ship more of the metal overseas amid weaker-than-expected domestic demand, with the so-called arbitrage window for exports opening up for traders for the first time since September, according to Shanghai Metals Market.