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.
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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
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.
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.
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