On the back of growing worldwide economic optimism and concerns about the impact of an Australian cyclone on stretched global supplies, copper hit a record price of $10,000 per ton on Feb. 2.
In trade on the London Metal Exchange, copper for delivery in three months' time hit exactly $10,000 per ton, before pulling back to stand at $9,941.
"Cyclone Yasi in Australia has added pressure to copper prices, with (mining company) Xstrata evacuating the largest copper mine in Australia ahead of the storm," said Ian O'Sullivan, an analyst at traders Spread Co. in London. "But the key drivers have been the strong PMI manufacturing numbers out of the U.S., Europe, and especially China, the world's largest consumer of copper."
Australia's biggest cyclone in a century shattered entire towns, pummeling the coast and churning across the country on Feb. 2, terrifying locals but causing no confirmed fatalities. Anglo-Swiss mining giant Xstrata evacuated its Mount Isa and Cloncurry mines as the storm headed further inland, after being downgraded to category one.
Added to the mix was upbeat economic data in China, and in Western industrialized nations that comprise the Organization for Economic Co-operation and Development (OECD) region.
"The final push (to $10,000 for copper) was fuelled by global recovery optimism in general and Tuesday's bullish manufacturing PMI (purchasing managers' index) releases in particular," said SEB commodities analyst Filip Petersson. "These indicated that the OECD recovery is accelerating while the Chinese economy remains stable.
"Thus, an OECD copper demand recovery from very low levels in combination with continued Chinese demand strength looks like the most likely scenario going forward," he added.
Copper is being propelled by tight global supplies of the industrial metal, which is used in plumbing, heating, electrical and telecommunications wiring.
"Commodity prices remain in an uptrend at the moment given resilient economic growth from the world's leading commodity demander China," added VTB Capital economist Neil MacKinnon. In the coming week, meanwhile, copper could strike new heights as China returns from its holiday break, according to O'Sullivan. "Prices could go even higher next week when the Chinese return from New Year's celebrations, and longer term, there is a real possibility of seeing $11,000 a ton in the coming months."
Copyright Agence France-Presse, 2011