Saturday, June 15, 2024

Copper Jumps to Record High Today; ‘New Oil’, Says Analyst

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Copper rose to an all-time high on Friday as the biggest economies showing signs of recovery from COVID-19 pandemic. The base metal soared 2% to $10,289.00 on the London Metal Exchange by 10:33 a.m. in London, news agency Bloomberg reported. The price of Copper increased more than 30% this year.

On the Multi Commodity Exchange (MCX), copper contracts for delivery in May traded higher by 1.8% at Rs 784.50 per kg at 5 pm. Analysts attributed the rise in copper prices to raising of bets by participants driven by the pickup in spot demand.

However, there are few new projects on the horizon, constraining future supply. Bank of America commodity strategist Michael Widmer said, “Linked to that, we forecast copper market deficits, and further inventory declines, this year and next,” CNBC reported.“With (London Metal Exchange) inventories close to the pinch-point at which time spreads can move violently, there is a risk backwardation, driven by a rally in nearby prices, may increase,” he added, according to CNBC. Widmer suggested that copper may spike to $13,000/t in the coming years after notching $10,000 last week for the first time in a decade.David Neuhauser, founder and managing director of US hedge fund Livermore Partners, told CNBC, “I think copper is the new oil and I think copper, for the next five to 10 years, is going to look tremendous with the potential for $20,000 per metric ton.”

“We think there are some very solid small cap companies that have massive production potential, and valuations are attractive, and Livermore could make great return on investment.”

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