Copper Homes in on $10,000 a Ton as Supply Angst Continues

Copper traded near $10,000 a ton, hitting a new two-year high on its way, as investors continue to pile in on a bet that miners will struggle to service a surge in demand for the bellwether industrial metal.

Base metals have posted broad gains in recent weeks, and copper opened Monday with a fresh advance to $9,988 a ton. Signs of improvement in manufacturing activity from the US to China have buoyed metals, although geopolitical risks and renewed uncertainty over monetary policy are clear risks.

Copper’s rally was fueled initially by a slew of disruptions at major mines that have left smelters rushing to find alternative supplies. Demand in China has been in a seasonal trough, but there are growing hopes that a tentative rebound in global manufacturing activity will help to shore up demand.

“The path forward from here will be data-dependent and led by individual metal fundamentals,” Citigroup Inc. analysts wrote in an emailed note. The copper outlook looks bullish in the next three months on the prospect of a tighter market and short covering, they said, while other metals have weaker physical fundamentals.