Copper prices surged to multi-year highs on Friday following reports of planned production cuts by major Chinese smelters.
Key points:
Price Surge: Three-month copper contracts on the London Metal Exchange (LME) jumped 1.2% to $8,998 per metric ton, while Shanghai Futures Exchange (SHFE) May copper contracts surged 1.3% to 72,610 yuan ($10,089.77) a ton – the highest since May 2021.
Chinese Influence: Announcement by Antaike indicating production cuts by Chinese smelters drove the rally. China dominates the global refined copper market, accounting for 47% of production last year.
Spillover Effect: LME prices for aluminum, nickel, zinc, and tin all registered gains due to potential supply restrictions.
Market Concerns: Despite the positive news, analysts remain cautious about the impact of a stronger US dollar and supply disruptions in other regions.
Outlook: Heightened volatility expected as market assesses supply dynamics and global economic growth prospects.
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