Copper touched its highest level since 2022 after a powerful rally fueled by forecasts of a growing global supply deficit.
The commodity’s gain since the start of January is approaching 20% with prices defying typical indicators of soft demand, especially in China. That’s partly because investors see tight mine supply creating a shortfall of the metal as soon as this year.
“Investors are pricing beyond near-term cyclical uncertainty and weakness in physical demand indicators,” Citigroup Inc. analysts said in an emailed note Monday. The bank sees copper climbing to $10 500 a ton in the near term amid a “looming tightening” of supply.
The metal was traded at $10 205 a ton by 12:38 p.m. Shanghai time Tuesday, after rising as much as 0.5% to a two-year high of $10 239. Prices surged 1.8% Monday as commodities markets got a boost from China’s plan to roll out special long-maturity bonds that could fund infrastructure spending.