Copper prices hit 10-year high due to supply concerns
Copper prices have hit a 10-year high, as concerns about supplies from Chile, sliding inventories, a lower dollar and expectations of stronger demand from top consumer China triggered fresh purchases.
The most-traded June copper contract on the Shanghai Futures Exchange jumped as much as 3.5% to $11,230.38 a tonne, a level unseen since February 2011. It closed up 3% at $11,230.38 a tonne.
Three-month copper on the London Metal Exchange hit $9,965 a tonne, its highest since March 2011, before retreating to $9,921 a tonne by 0705 GMT, still up 1.7%.
Copper is often used as a gauge for global economic health and is used in electric vehicles and renewable energy productions. Mining unions and port workers in Chile have threatened protests over pension savings withdrawal issues.
Copper prices are being supported by strike threats in Chile, though high prices are deterring downstream physical markets from buying, ING analysts said in a note.
Yangshan copper premium came down to $46.50 a tonne, its lowest since November, indicating weakening demand from top consumer China.
One party controls 80%-90% of available copper stocks and short-term futures on the LME, exchange data showed. Spot copper treatment charges (TCS) in China increased for the first time since August, up to $2 at $32.50 a tonne as of April 25, Asian Metal data stated.