Copper scales record high on industry and speculative buying
* Aluminium touches three-year peak
* Zinc surpasses $3,000 for first time since June 2018
* Lead hits highest since Oct. 2019
By Eric Onstad
LONDON, May 7 (Reuters) - Copper burst higher on Friday to a
record peak, fuelled by speculators and industrial buyers on the
back of rosy economic data as Western economies recover from the
Prices have soared 135% since the lows of last March when
the emerging COVID-19 pandemic and lockdown hit demand.
Copper prices have also been propelled by forecasts of
surging demand spurred by a green revolution of electric
vehicles and renewable energy that will require more of a metal
that is a strong conductor of electricity.
Benchmark copper on the London Metal Exchange (LME)
broke above the previous record high of $10,190 set in 2011 to
$10,435. It had gained 3.3% to $10,421 by 1630 GMT.
"We're in uncharted territory right now and the market is a
bit frothy. The industrial players are in panic mode since
there's not much supply," said Gianclaudio Torlizzi, partner at
Milan consultancy T-Commodity.
Some Chinese buyers of physical copper, such as the State
Grid may now have to bite the bullet and buy after holding off
from purchases in the hope there would be a pullback in prices,
Copper prices may have to hold at high levels to draw out
scrap supply to balance the market, Citi analyst Max Layton
The most-traded June copper contract on the Shanghai Futures
Exchange climbed as much as 2.7% to 74,950 yuan
($11,603) a tonne, its highest since May 2006 and only 1.6%
below its record peak of 76,160 yuan.
China, the world's biggest consumer of industrial metals,
unleashed stimulus and infrastructure spending last year to
promote economic recovery from the pandemic, leading to a
record-breaking 38% surge in copper imports.
Moves by China, however, to withdraw stimulus and dampen
debt levels, could cool the copper market in coming months,
T-Commodity's Torlizzi added.
"Once stock levels in industrial warehouses start to
stabilise, together with the credit slowdown in China, that
should pave the way for some consolidation lower."
Other metals also hit new peaks: Aluminium touched a
three-year high, zinc broke through the $3,000 mark for the
first time since June 2018, and lead rose to its strongest level
since October 2019.
* LME aluminium gained 2.1% to $2,540 a tonne, while
zinc advanced 2.8% to $3,025, nickel rose 0.8%
to $18,090, lead firmed 0.8% to $2,236, while tin
dropped 1% to $29,840.
(Additional reporting by Mai Nguyen in Hanoi; Editing by David
Goodman, Hugh Lawson and Jane Merriman)
First Published: 2021-05-07 04:10:19
Updated 2021-05-07 18:51:55
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