Copper Hits 10-Year High Amid Supply Constraints And Infrastructure Plans
By Tyler Durden
Copper futures hit their highest levels in ten years on Monday as several factors, including supply concerns, a weaker dollar, the Biden administration’s plan to improve infrastructure, growth in renewable energy, and China’s increasing demand, continue to fuel expectations of higher demand for the industrial metal.
The dollar continues to edge lower Monday amid speculation Federal Reserve Chairman Jerome Powell will not announce tapering at this week’s meeting, fueling higher copper prices.
Meanwhile, traders are concerned about supply due to a strike in Chile.
“We are in for a good run higher as we are having supply issues. Chilean port workers threatening to strike, which is a short-term issue, but will cause some trouble for shipments into China in an already tight concentrate market,” commodities broker Anna Stablum of Marex Spectron told Reuters.
“We are seeing some concerns about supply cuts in China due to environmental pressures,” Stablum added.
The resilience of copper prices suggests industrial use for copper in China continues.
The push for a massive infrastructure overhaul in the US has provided support for copper. The Biden administration proposed infrastructure investments of hundreds of billions of dollars to fuel growth in renewable energy.