Copper rallied for a fourth day on Friday, adding to this week’s powerful surge across base metals on hopes for a post-pandemic demand boom.
On the Comex market, copper for delivery in December gained 2.85% to $3.4040 a pound ($7,488 a tonne) by mid-afternoon in New York.
The metal rose as much as 1.5% to a seven-year high of $7,511 a tonne on the London Metal Exchange.
“The market remains buoyed by fiscal stimulus measures across the world,” Australia & New Zealand Banking Group Ltd. analysts wrote in a note to Bloomberg.
Copper has risen about 70% since its March lows, amid the depths of the coronavirus crisis.
On Friday, data from the Shanghai Futures Exchange showed copper stockpiles in its warehouses falling to the lowest since late 2014.
The strength of China’s manufacturing rebound and the country’s seemingly insatiable appetite for imports of refined copper are the fundamental bedrock of copper’s 2020 turnaround. The country’s latest factory gauge, due Monday, is expected to show activity in the top copper consumer continuing a steady expansion.
But funds are now increasingly in the driving seat with investor positioning at or near historical highs on both the CME and LME contracts.
US dollar weakness has also helped. The metal is also gaining traction as a bet on hawkish climate policies that will expand copper-rich power networks.
In the US, president-elect Joe Biden has promised to spend billions on renewable energy. Meanwhile, countries in the European Union have already rolled out plans to spend heavily on the green economy and China plans to go carbon-neutral by 2060.