LONDON; Copper prices jumped to their highest since June 2022 on Friday as investors piled into the market on expectations of a demand upswing on the back of potential cuts to interest rates in the coming months.
Traders said weaker than expected credit data from top consumer China after disappointing trade numbers earlier on Friday did little to temper enthusiasm for buying industrial metals.
Benchmark copper on the London Metal Exchange (LME) was up 1.2% at $9,452 a metric ton at 1708 GMT. Prices of the metal used in the power and construction industries earlier hit a session high of $9,590.50 a ton.
Signs of economic recovery, particularly in China, have triggered a buying frenzy that also pushed aluminium prices to their highest since February 2023 and zinc to one-year peaks.
“There’s a flood of liquidity coming into metal markets and markets generally ... the growth cycle will be quite strong in the next few months,” said Dan Smith, head of research at Amalgamated Metal Trading, adding that Chinese PMI data reinforced optimism over economic growth.
Surveys of purchasing managers in China’s manufacturing sector showed the sector expanding at the fastest pace in 13 months in March, driven by orders from customers at home and abroad.
Further copper price support came from worries about supply disruptions creating shortages of concentrate used to produce refined metal.
“Tight copper mine supply is increasingly constraining refined production: The much-discussed lack of mine projects is finally starting to bite,” BoA Securities said in a recent note.
“Aluminium production growth has halved. Keeping in mind the steady demand backdrop, we are bullish (on) both metals.”
BoA expects copper and aluminium prices to average $12,000 and $3,250 a ton respectively by 2026.
Aluminium was up 1.3% at $2,487 a ton, zinc advanced 2.4% to $2,825, lead rose 1.4% to $2,172, nickel slipped 0.2% to $17,770 and tin added 1% to $31,995. Tin prices earlier rose to $33,100, near the 22-month highs hit earlier this week on worries about supplies of the metal used as solder in the electronics industry.
Sliding tin stocks in LME-registered warehouses have nearly halved to 4,115 tons since the middle of December.
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