LONDON- Fund buying propelled copper prices to new highs on Friday, but some investors and analysts were cautious about possible output cuts in China and whether the rally would be sustained.
Shanghai copper prices hit a record high and prices in London and Chicago touched an 11-month peak after Chinese smelters agreed to trim production in the face of weak profits and losses.
Three-month copper on the London Metal Exchange had advanced 1.9 percent to $9,057 per metric ton, the highest since April 2023.
US Comex copper futures gained 1.8 percent to $4.12 a lb.
“This is now being driven by hot money moving back into the market, but as we know, hedge funds are not married to a position, they will seek a divorce at any given time if things start to turn sour,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Major Chinese copper smelters have agreed to lower operation rates, adjust maintenance plans and postpone projects, state-backed research house Antaike said on Thursday, but some traders said they had doubts about any output reductions.
A bottoming in the global industrial cycle is expected to boost copper, Goldman Sachs analyst Nicholas Snowdon wrote in a note.
