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Copper prices surge to a 2-year high on mixed global demand

May 14, 2024

Key points

  • Copper prices hit their highest level since April 2022, reflecting increased investments in base metals.
  • Weak demand persists in China due to high prices impacting consumer sectors, notably in wire rod manufacturing.

Copper prices reached their highest point since April 2022 on Tuesday, propelled by significant fund inflows into the base metals sector, despite diminished demand from China.

Detailed technical analysis chart of Copper prices on VT Markets platform, showing a positive trend and indicators such as moving averages and MACD, accompanying an article on Copper prices surging to a 2-year high due to mixed global demand

Picture: Copper prices poised for further gains. Download the VT Markets app.

Copper hits near 2022 peak on London Metal Exchange

On the London Metal Exchange (LME), three-month copper rose by 0.3% to $10,210.50 per metric ton by early morning, briefly touching $10,255.50. This year, copper has seen a 19% increase and is now just $600 shy of its 2022 peak price of $10,845.

Investments have surged into base metals, driven by expectations of U.S. rate cuts, ongoing supply disruptions, and a rising demand for metals in sectors related to green energy. Investors are also using these commodities as a hedge against inflation.

Also read: Copper Approaches $10,000 per Ton, Attracts More Investors

China’s copper demand slows down

Conversely, in China, high copper prices have dampened activity in the physical market. The second quarter, usually a period of strong demand, has seen lower-than-expected consumption levels. In the Shanghai Futures Exchange (SHFE), the most-traded June copper contract rose by 1.7% to 82,070 yuan ($11,339.08) per ton.

Mixed performance in LME metals market

In other metals, LME aluminium edged up by 0.3% to $2,550 per ton, while tin climbed 1.1% to $33,265. However, nickel saw a decrease of 0.3% to $19,165, zinc dropped by 0.4% to $2,987, and lead eased by 0.3% to $2,243.

On the SHFE, aluminium rose by 0.3% to 20,545 yuan per ton. Zinc increased by 1% to 23,660 yuan, lead advanced by 1.1% to 18,295 yuan, and tin jumped by 3.5% to 271,010 yuan. Nickel fell by 0.4% to 143,000 yuan.

This dynamic in metal prices indicates a complex interplay between investment flows and real-world demand, shaping the market’s trajectory in the near term.

CFD trading offers opportunities to capitalise on these fluctuations, allowing traders to speculate on price movements without owning the underlying assets.

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