Copper surged to its highest-ever level, extending a powerful, months-long rally driven by financial investors who’ve piled into the market in anticipation of deepening supply shortages.
Futures on the London Metal Exchange jumped more than 4% in early Monday trading, taking copper past $11,000 a ton for the first time. The market has seen many optimistic forecasts, and BHP Group Ltd. wants to buy rival Anglo American Plc chiefly for its copper mines.
Several developments in 2024 have emboldened copper bulls and drawn in a rising flow of speculative money. Tight supply of copper ore fueled talk of output cuts by smelters, while a short squeeze on the New York futures market this month triggered a global rush to secure the metal.
“That has taken prices to another level and it’s very difficult to call a top in this environment,” Craig Lang, principal analyst at researcher CRU Group, said by phone from Singapore. “Commodities markets do tend to overshoot.”
Investors, traders and mining executives have warned for years that the world faced a critical shortfall of copper amid ballooning demand in green industries — from electric vehicles to renewables infrastructure. Jeff Currie, commodities veteran and the chief strategy officer of the energy pathways team at Carlyle Group Inc., said last week that copper was the best long trade he has ever seen.
LME copper was up 3% to $10,992.50 a ton by 12:04 p.m. Shanghai time on Monday.
Prices have gained more than a quarter since the start of this year, spearheading across-the-board gains for major industrial metals. Gold has also rallied to a record with copper, with both metals getting support from optimism that the US Federal Reserve will start cutting interest rates this year.
Many participants in the physical trade have warned that copper prices were running ahead of reality. Demand remains relatively tepid — especially in top buyer China, where inventory levels remain high.
A series of setbacks at major mines are fueling fears that a much-anticipated production shortfall will arrive earlier than expected. Smelter treatment fees — a gauge of tightness in the ore market — plunged below zero in April.
And the short squeeze on the Comex exchange in New York drove prices there to an unprecedented premium over the LME. That triggered a rush to reroute metal supplies to the US, meaning less metal available elsewhere.
“The Comex short squeeze is rediverting copper to the US and tightening supplies in other regions,” Gong Ming, an analyst with Jinrui Futures Co., said by phone. “The Chinese market is expected to see inventories withdrawal soon with exports rising.”
Using artificial intelligence can have benefits for both advisors and their clients, according to new research.
Broker-dealers that sold the defunct securities backed by Inspired Healthcare generated more than $100 million in fees and commissions.
FINRA barred the advisor, Sung Moo Cho, last month.
A new MetLife survey finds real estate professionals are increasingly steering clients toward tax experts as rising property values leave more sellers facing significant capital gains.
The independent broker-dealer expands its business development bench with a new recruiter and an internal promotion in the West.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
