Benchmark LME copper edged higher on Wednesday, hovering around 2012 highs on optimism about a global economic recovery that bodes well for metals demand, against the backdrop of tightening supply.
Extending its rally into a fourth consecutive session, three-month copper on the London Metal Exchange rose as much as 0.3 percent to $8,432.50 a ton in early trade. It hit $8,437 on Tuesday, its strongest level since May 2012.
Copper, which is often used as a gauge of global economic health, defied a firmer US dollar that usually dampens the appeal of greenback-priced metals.
– Copper’s red-hot rally rolls on with London Metal Exchange (LME) three-month metal hitting $8,437 per ton on Tuesday, its highest level since May 2012.
Exchange stocks are low and LME time-spreads are tightening. Copper’s micro dynamics are reinforcing the macro reflation trade that is lifting prices across the commodities spectrum.
Throw in a sprinkling of electric vehicle stardust and you can see why the likes of Goldman Sachs and Citi are doubling down on their bull calls for the copper market.
Both banks have raised their 12-month price target to $10,000 per ton, Goldman warning that copper may be heading for a period of “scarcity pricing”. – Reuters