Copper erased gains after topping $10 000 a metric ton for the first time since 2011, with the dollar advancing and investors taking a breather as the metal approaches an all-time high.
Prices slipped 0.2% after rising as much as 1.3% to $10 008 a ton on the London Metal Exchange. The commodity hit a record $10 190 in February 2011. The dollar, trading little changed earlier, gained as much as 0.3%, reducing the appeal of copper for investors holding other currencies.
Copper has been among the best performers in a month where metals ranging from aluminum to iron ore have surged to the highest in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the virus pandemic. A push toward cleaner energy sources is also seen boosting consumption of copper, used in everything from electric vehicles to solar power systems, further straining supplies.
Investors have piled into copper, with aggregate open interest in Shanghai Futures Exchange copper contracts at the highest in more than a year and hedge fund managers boosting bullish Comex copper bets in the week ended April 20.
With copper demand set to soar once more, there are mounting concerns that producers will struggle to plug the gap as they battle a host of technical and regulatory pressures. In the longer term, producers worry that plans to boost mining royalties could stifle investment.
Prices have doubled from lows in March, along with a surge across raw materials from oil to agriculture. That’s spurring debate about whether the current boom may herald a so-called commodities supercycle. It has also helped push mining shares to multiyear highs.