Copper at highest since 2012 as global equities extend gains
Copper climbed to the highest level since 2012 as a risk-on mood across global markets helped to lift equities and put pressure on the dollar.
Prices have soared on optimism that the use of coronavirus vaccines will aid a rebound in global growth. Prices climbed 5.3% last week on the London Metal Exchange, in the biggest gain since July. Monday’s gain came as Asian equities hit new heights and the dollar slipped, boosting the buying power of consumers using other currencies.
The metal used in pipes and wires inched higher even as public holidays in China and the US contributed to thin trading conditions. While new Covid-19 variants are threatening to temper the outlook, investors are banking on US government spending and the coronavirus vaccine rollout to boost the economic recovery.
“There’s a risk-on mood across the whole market, whether it be oil, equities or metals,” Colin Hamilton, MD for commodities research at BMO Capital Markets, said by phone from London. “It’s one of those markets where even bad news is good news.”
LME prices have rallied strongly during the closure of Chinese markets for the Lunar New Year holidays, and investors expect that the usual dip in factory output over the period may be less severe this year owing to restrictions on travel.
US markets are shut for Presidents’ Day on Monday, while exchanges in China, Hong Kong and Taiwan are also closed. Chinese markets will reopen on Thursday.
Production guidance from the top 25 copper producers indicates the market may be in a sizable deficit this year, “assuming our scenario of 5% demand growth is in the ballpark,” according to Bloomberg Intelligence analysts Grant Sporre and Andrew Cosgrove. Copper’s on course in February to post an 11th monthly gain.
Copper is “being driven by a cocktail of positive factors -- including rising inflation expectations caused by US stimulus, a falling dollar, and historically low stocks,” said Gavin Wendt, a senior resource analyst at MineLife Pty. “The 2021 copper production outlook is likely to be negatively impacted as a result of Covid in a number of major South American producing nations.”
Copper climbed as much as 0.9% to $8,406 a ton on the London Metal Exchange, the highest level since 2012, before paring gains to trade at $8 377 at 12:24 p.m. in London. Other metals were mixed, tin rose 1.4% after posting an unprecedented 15th weekly rise last week, while aluminum slipped.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation