Copper May Extend Record Run to $10,000 as Recovery Accelerates
Copper surged to records in London and New York as manufacturing improved from China to the U.S., bolstering the demand outlook for the metal used in construction and electrical applications.
Copper for three-month delivery on the London Metal Exchange advanced for a sixth day, gaining as much as 0.4 percent to $9,984.75 a metric ton, surpassing the previous peak of $9,968 reached yesterday. It traded at $9,955 a ton at 2:52 p.m. in Singapore. March-delivery futures on the Comex in New York also climbed to an all-time high of $4.5595 a pound.
“The market likes to test big, round numbers, and we’re looking increasingly at $10,000 pretty soon,” said Yingxi Yu, a Singapore-based analyst at Barclays Capital. “Strong macroeconomic data have provided the lift to market sentiment needed for the current rally.”
Manufacturing in the U.S. unexpectedly accelerated in January at the fastest pace in more than six years; European manufacturing grew at the quickest pace in nine months; and U.K. production increased at a record pace in January, data yesterday showed.
In China, a reading of 52.9 for a purchasing managers’ index released by the logistics federation yesterday exceeded the 50 level dividing expansion and contraction, while Indian manufacturing growth accelerated in January, separate reports showed.
“With the Chinese out, liquidity is thin and volatility will increase,” said Yu. China’s financial markets are closed from today through Feb. 8 for the Lunar New Year holiday.
Declining Stockpiles
Copper, often taken as a gauge of economic gauge, surged 30 percent last year as the global economy recovered and investment demand increased, driving stockpiles lower for the first time since 2004. Commodity assets under management rose to a record $376 billion last year, boosted by demand from large investors, Barclays Capital said on Jan. 27.
Aluminum in London rose 0.2 percent to $2,557 a ton, lead gained 0.3 percent to $2,547 a ton, while zinc was little changed at $2,475 a ton. Nickel increased as much as 0.5 percent to $28,130 a ton, and tin climbed 0.2 percent to $30,200 a ton after reaching a record $30,400 a ton yesterday.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Matthew Oakley at moakley@bloomberg.net
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