Copper is on the verge of making history. Already trading at all-time highs, the metal is approaching the $6,000-a-ton barrier after the three-month price on the London Metal Exchange closed the week up 5.7 per cent at $5,749. As usual these days, China is one of the main drivers behind the surge. It bought 3.8 million tons of the metal last year, nearly a quarter of the 16.8 million sold around the world. Consultancy CRU expects Chinese demand to grow by another 9 per cent this year.
And as demand has grown, supplies have been squeezed even more by a series of disruptions at mines around the world, including a strike at Mexico's La Caridad mine.
Despite some end-users replacing copper wiring with aluminium and pipes with plastics, analysts expect demand to remain high through the rest of the year, which could push copper beyond $6,000 a ton.
Indeed, the growing supply-demand imbalance has led investment and pension funds to pile into the market, pushing the price higher still as physical stocks hit new lows. Europe, according to CRU, has only 25 tons. Globally, there is enough of the metal to satisfy just two weeks of orders.
Copper isn't the only metal benefiting from the worldwide commodity bonanza. Helped by a drop in the dollar and an oil price jump, gold broke through the $600-an-ounce barrier on Thursday to hit $601.90 in New York, its highest level in 25 years. It ceded some ground to end the week just shy of that threshold.Reuse content