Copper prices soared to their highest level in 10 years as the market expects tight supply as the momentum of global economic recovery strengthens.
With a wide range of industrial commodities, from iron ore to aluminum, copper prices have also risen rapidly recently. The accelerating pace of global vaccine promotion, the prospect of a rebound in economic growth, the weakening US dollar and the expectation that the years of low inflation in major economies may end have all boosted the price of copper, which is the economic wind vane.
At the same time, countries around the world have launched more aggressive climate targets, and copper plays an indispensable role in the transition to green energy, which further stimulates the market’s expectation that the rise in copper prices will be long-term. Goldman Sachs Group (339.35,8.50,2.57%) and Trafigura, a commodity trader, have said they expect copper prices to break the previous record high of $10190 per ton in 2011 and rise sharply due to short supply.
As of 11:18 a.m. Beijing time on Monday, the price of copper on lunlun copper metal exchange rose 1% to $9650 a ton.
Preliminary indicators show that China’s economy, the world’s largest metal consumer, continued to boom in April after record growth in the first quarter, with strong exports and rising business confidence supporting the recovery. U.S. data released this week may also show a faster pace of economic recovery, and Fed policymakers may reiterate that they are not in a hurry to withdraw support.
On the supply side, Chilean port workers called for a strike on Monday in response to President Sebastian Pinera’s blocking a bill that would allow people to make a third round of early withdrawals from pension funds. The move could disrupt the country’s exports, which account for about a quarter of the world’s copper supply.