Copper futures on the London Metal Exchange (LME) closed higher on Monday as many analysts and traders expected copper prices to hit a 10-year high, helped by record highs in global stock markets and a fall in the dollar.
17:00 London time (00:00 domestic time on April 20th)), LME copper for delivery in three months closed up $165, or 1.79%, at $9376 a tonne, having previously hit its highest level since February 25th at $9436.
Ole Hansen, an analyst at Saxo Bank (Saxo Bank), said that "sooner or later the high hit in February" of $9617 would push prices to their highest level since 2011. The next target will be $10000 a tonne, he said.
Investors are optimistic about the prospects for the global economic recovery after the epidemic, pushing the stock market higher.
Copper prices were boosted by a fall in US bond yields, which pushed stocks higher and depressed the dollar, which made metals cheaper for non-US buyers.
The dollar weakened further on Monday, while the yield on the 10-year Treasury note rose slightly.
Analysts at ING (ING) said copper prices would be supported by an economic recovery, a hot market, tight supply and a strong demand outlook.
"upside risks are expected to dominate the copper market in the second quarter of this year, suggesting that copper prices are expected to test previous highs," they said. "
But they added: "the uptrend in copper prices is expected to weaken as the inventory restocking cycle draws to a close and slower credit growth in China hits investment demand."
Copper prices will hit $10500 a tonne within three months, according to analysts at Citi.
Speculators reduced their net long positions in COMEX copper futures and options in the week ended April 13, according to a report released by the Commodity Futures Trading Commission ((CFTC)) on Friday. This also gives investors more room to increase their holdings, helping to raise the price of copper.
Long positions of speculators in the LME market have rebounded from their lows earlier this month, according to Marex Spectron data.
Spot copper supply is tightening, with LME copper rising to $15 from three-month copper.
