Copper, aluminum and other industrial metals pushed higher, extending a powerful rally on concerns about tightening supplies, a surge of shipments to the US and rising investor enthusiasm for commodities.
Nickel, tin and copper all gained more than 2% in London, with the red metal rising back toward a record above $13,300 a ton reached earlier this week. The six base metals tracked by the LMEX Index are on course for a fourth, consecutive weekly gain, the longest winning run since August.
Copper’s price surge has been particularly stunning, with concerns Washington will impose an import levy drawing shipments into the US and tightening stocks elsewhere. Meanwhile, a slew of global mine disruptions in recent months heightened worries supply won’t keep up with demand for the metal that’s key for the world’s electrification, as well as traditional manufacturing and construction.
Goldman Sachs Group Inc. lifted its first-half copper forecast to $12,750 a ton, adding that prices were poised to retreat in the second half of the year. Chinese physical buyers have hesitated to pay current prices.
“Investor inflows have added a scarcity premium to copper in the face of low ex-US inventories as the expectation of a US tariff on copper has pulled metal into the US,” the Goldman analysts said in a note. Still, prices above $13,000 are not expected to be sustained as a decision to implement tariffs “would likely signal the end of US stockpiling,” they said.
The outlook for metals was also in the spotlight after Rio Tinto Group said it was in talks to buy Glencore Plc to create the world’s biggest mining company. A tie-up would represent the largest-ever deal in an industry that has been gripped by takeover fever as producers seek to bulk up on copper.
A speculative frenzy in China has helped turbocharged the metals rally, with traders and deep-pocketed funds piling into commodities like copper, nickel and lithium. Open interest hit records across the six base metals traded in Shanghai.
Copper rose 1.9% to $12,964.00 a ton on the London Metal Exchange at 12:20 p.m. local time, as aluminum gained 1.7%. Nickel — which spiked to a 19-month high on Wednesday, before plunging as traders sought details on output cuts in top producer Indonesia — was 2.5% higher at $17,550 a ton.
–With assistance from Charlie Zhu and Winnie Zhu.
