Copper Posts 17-Month High on Demand Bet as Citi Sees Strength
(Bloomberg) -- Industrial metals climbed, with copper closing at the highest price in almost 18 months, on speculation that demand will accelerate amid improving growth in the U.S. and signs of a stabilizing economy in China.
An index of the six main metals traded in London surged last month by the most since 2010 on bets that consumption will increase. In the U.S., President-elect Donald Trump has pledged to spend as much as $1 trillion on infrastructure, boosting the outlook for demand.
“People are beginning to see that the demand side of the equation is going to be better than expected,” Bill O’Neill, a founding partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “There’s still optimism of more infrastructure spending. That’s playing into higher prices.”
Copper for delivery in three months rose 3.3 percent to $5,950 a metric ton ($2.70 a pound) at 5:51 pm. on the London Metal Exchange. That’s the highest since June 2015. The metal is up 26 percent this year.
In New York, copper futures for March delivery rose 2.8 percent to $2.698 on the Comex, the highest level in almost 18 months.
The metal should push above $6,000 a metric ton next year as manufacturing improves in developed economies, offsetting any future weakness in demand growth from China, Citigroup analysts said in a note, raising the price forecast for 2017 by 9 percent.
Turquoise Hill Resources Ltd. said Friday that copper shipments from the Oyu Tolgoi mine in Mongolia were suspended after authorities imposed curbs on border crossings.
Zinc jumped 3.7 percent to $2,766 a ton on the LME. Nickel advanced on concern that the Philippines will suspend more mines after a national mining audit. Aluminum, lead and tin also gained.