Copper hits nine-year high, helped by infrastructure, green energy plans
Apr. 23, 2021 2:47 PM ET Copper Futures (HG1:COM) By: Carl Surran, SA News Editor 24 Comments
Copper futures wrap up a third consecutive weekly gain to score their highest finish in more than nine years, sparked in part by raised expectations for copper demand from the Biden administration's infrastructure and renewable energy spending plans.
May Comex copper ( HG1:COM) closed +1.5% to $4.336/lb., the highest settlement since August 2011 and capping a 4% rise for the week.
ETFs: COPX, CPER, JJCTF, JJC
Shares of industrial metals miners are on the move: FCX +5.6%, TECK +1.8%, HBM +1.5%, SCCO +3.2%, AA +4%, ARNC +2.1%, CSTM +4.8%, RIO +2.8%, BHP +2.8%.
Steel companies also sport strong gains: X +6.2%, CLF +4.2%, MT +4%, NUE +1.7%, STLD +3%.
"Technology, semiconductors, data centers and cellular towers all require significant copper usage," Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, tells MarketWatch, and "we have not seen an investment in new copper supply over the past few years, which means users have been competing for the relatively scarce supplies of copper... Mine development is a long-term activity, leaving us with a tight market for some time."
The increase in U.S. housing demand and home building also has raised demand for copper, which is a major component in home building, Haworth says.
"Biden's new climate promises and at least lip service by China to greener domestic policies are keeping the demand picture rosy," says Tai Wong, head of metals derivatives trading at BMO Capital.
The global world refined copper market showed a 28K metric ton surplus in January, compared with a 1K-ton deficit in December and a 34K-ton deficit in the year-earlier quarter, the International Copper Study Group says in its latest monthly bulletin.
Freeport McMoRan CEO Richard Adkerson gushed yesterday that " the outlook for copper has never been better." |
