Copper hits highest since 2013 on stimulus hopes, supply fears
- Benchmark copper on the London Metal Exchange (LME) was up 1.7% at $8,136.50 a tonne
- New money is on the table from investors who see a very bullish story.
LONDON: Copper soared to its highest since February 2013 on Wednesday as Democrats who want increased economic stimulus edged closer to control of the US Senate, while a blockade threatened to curtail supply from a major mine in Peru.
Benchmark copper on the London Metal Exchange (LME) was up 1.7% at $8,136.50 a tonne at 1126 GMT, taking gains this year to around 5% after a 26% price rise in 2020.
Copper is used in power and construction and some analysts believe massive investment in green infrastructure and constrained supply will push prices higher in the coming years.
"New money is on the table from investors who see a very bullish story," said independent analyst Robin Bhar.
ELECTIONS: Democrats won one hotly contested Senate race in Georgia and pulled ahead in a second. Victory in both would give them control of the Senate.
MARKETS: Investors gobbled up riskier assets.
Bond yields and global equities rose, with China's blue-chip index at a near 13-year peak, and oil prices hit their highest since February 2020.
The dollar fell, helping metals by making them cheaper for buyers with other currencies, and US inflation expectations rose, another boost for commodities seen as an inflation hedge.
SUPPLY: Peru's Las Bambas mine could halt production due to a three-week-long roadblock protest by locals that has curtailed exports, a mining association leader said.
ECONOMY: The global economy is expected to expand 4% in 2021, the World Bank said, but warned that rising COVID-19 infections could limit recovery.
CHINA: China imposed restrictions in a city near Beijing to stave off another coronavirus wave.
EUROPE: Economic activity in the euro zone contracted more sharply than previously thought at the end of 2020, a PMI survey showed.
FACTORIES: US factory activity accelerated to its highest in nearly 2-1/2 years in December, echoing strong manufacturing data from China and Europe.
OTHER METALS: LME aluminium was up 1.3% at $2,066.50 a tonne, zinc rose 1.7% to $2,859.50, nickel gained 1.4% to $17,925, lead added 0.1% to $2,082.50, and tin was 0.1% higher at $21,200.
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