China drives copper price surge, bringing hope to African producers
- Chinese demand for key metal in green economy along with weak dollar sends prices over US$10,000 per tonne for first time since 2011
- Democratic Republic of Congo and Zambia prime beneficiaries after last year’s subdued activity
A tonne of copper on the London Metal Exchange was selling for US$9,963 after briefly exceeding US$10,000 on Thursday. The last time it fetched such a high price was in February 2011, when it sold for a high of US$10,190 per tonne.
Chris Berry, president of New York-based commodities advisory firm House Mountain Partners, attributes the price surge to a weaker US dollar and positive consumer spending data in the wake of the Covid-19 stimulus.
He said optimism around the long-term electrification of the global economy, and the threat of work stoppages at large producing mines in South America, had helped boost the prices. Chile, the world’s top copper producer, is facing challenges after port workers staged protests over the government’s plan to block early pension withdrawals, a move that could cut supplies.
“I am certainly bullish on copper over the long term, but the severity of the strength in the copper price does give one pause,” Berry said.
Robert Edwards, the principal analyst for base metals at London-based CRU, agreed that the broader economic recovery and global government fiscal or central bank commitments had helped boost copper prices.