By Eric Onstad
LONDON: Copper clawed higher on Thursday to just below the key $10,000 level, emboldened by promises from the U.S. central bank to keep stimulus taps flowing and interest rates low.
The U.S. Federal Reserve said on Wednesday it was too early to consider rolling back its emergency support amid the coronavirus pandemic.
Three-month copper on the London Metal Exchange had gained 1% to $9,977 a tonne by 0920 GMT, having risen to as high as $9,999.50 a tonne earlier in the session.
The last time copper rose above $10,000 was in February 2011, when it touched an all-time record of $10,190.
“It’s just a question of time that we have another go at that magical, psychological level and then that will open up an attempt to reach the record highs from 2011,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“The underlying momentum seems to be very solid at this stage, so is the investment demand and the Fed has signalled that stimulus and low interest rates are staying for a while.”
A weaker dollar also supported the industrial metals markets, making commodities priced in the U.S. currency cheaper for buyers using other currencies.
The most-traded June copper contract on the Shanghai Futures Exchange hit 72,960 yuan ($11,273.53) a tonne, its highest since February 2011.
Goldman Sachs forecast copper would average $9,675 a tonne in 2021, $11,875 a tonne in 2022 and $12,000 a tonne in 2023.
However, the Yangshan copper premium fell to $43 a tonne, its lowest since April 2017, indicating weakening demand from top consumer China as prices have leaped 29% this year.
Other metals also reached fresh peaks. LME aluminium was up 0.9% to $2,421 a tonne, having touched the highest since April 2018, while zinc hit the strongest since June 2018, climbing 1% to $2,950.
Tin edged up 0.2% to $28,590 after hitting the highest since August 2011, while lead rose 0.7% to $2,117.50 and nickel advanced 0.6% to $17,540.