Investors bought riskier assets across the board, sending global equities to new peaks, oil prices to a nine-month high and the dollar to its weakest since April 2018.
Benchmark copper on the London Metal Exchange (LME) was up 1% at $7,914 a tonne in official rings, nearing last Friday’s peak of $7,973.50, the highest since February 2013.
“$8,000 is once again in reach,” said Saxo Bank analyst Ole Hansen. “It’s part of the continued everything rally we’re seeing across markets.”
“There’s a very heightened expectation for commodities moving into 2021. The market is betting on a weaker dollar but also a global economic recovery and Fed policy remaining easy,” he said.
But with speculators rushing into copper, a correction will come, he said. “The question is when.”
STOCKPILES: Copper stocks in warehouses registered to the biggest exchanges – the LME, the Shanghai Futures Exchange (ShFE) and Comex in the United States – are falling.
Inventories in the LME system at 127,725 tonnes are the lowest since September, stocks in ShFE warehouses at 82,092 tonnes are the lowest since 2014 and Comex stores contain 78,084 tonnes, the lowest since June.
SPREAD: However, the discount for LME cash copper over the three-month contract at about $22 is the highest since June, suggesting there is no shortage of nearby metal.
POSITIONING: Speculators boosted their net long positions in LME copper to 41% of open contracts by Tuesday, the most since 2017, brokers Marex Spectron said.
CHINA OUTPUT: China’s refined copper and lead production rose to record monthly highs in November.
ILZSG: A global zinc market surplus rose in October while the lead market was in deficit, the International Lead and Zinc Study Group (ILZSG) said.
OTHER METALS: LME aluminium was 0.3% higher at $2,041 a tonne, zinc was up 1.3% at $2,870, nickel rose 1.2% to $17,622 and tin was up 0.4% at $20,000 for the first time since April 2019.
Lead bucked the trend, falling 0.1% to $2,048 a tonne.
