Copper prices hit two-year high on fund buying surge

Copper prices in London surged to a two-year high, breaking through the $10,000 per metric ton barrier on Friday. This spike was triggered by record highs in Shanghai prices due to increased fund buying activities.

The three-month copper on the London Metal Exchange climbed 1.4% to $10,006 per ton, reaching its peak at $10,033.50, the highest level since April 2022. Meanwhile, the most traded June copper contract on the Shanghai Futures Exchange hit a record high of 81,180 yuan and closed 2.2% higher at 81,100 yuan ($11,192.07).

The surge in copper prices was further fueled by investor interest following BHP Group's unsuccessful takeover bid for Anglo American. The rejection of the $39 billion bid by the London-listed miner emphasized the undervaluation of its future prospects.

According to ING commodities analyst Ewa Manthey, the speculation of supply shortages in copper, coupled with growing optimism about demand from the green energy sector, is propelling prices to new highs. The looming supply squeeze was highlighted by BHP's bid for Anglo American.

Despite the bullish trend, concerns persist about the demand from China, the top consumer of copper. Record low premiums for imported cargoes, high inventories, and a delayed demand recovery are still looming challenges.

In the broader market, LME aluminum rose 1.4% to $2,599.50 per ton, while zinc surged 1.5% to $2,890, hitting a one-year high. Lead and nickel also saw gains, with tin being the only metal experiencing a decline.

Overall, copper's upward trajectory marks its fourth consecutive week of growth, while other metals exhibit mixed performances, reflecting the complex dynamics of the global commodities market.