“Spot iron ore broke $200 a tonne for the 1st time, while copper approached a record high on Chinese demand”— Paul Ebeling
The reopening of major industrial economies is sparking a surge across commodities markets from corn to lumber, with tin climbing above $30,000/tonne for the 1st time since Y 2011 Thursday.
In the wake of rising evidence of inflation driven by higher raw materials prices investors are also focused on when the Fed might start paring back its emergency support.
We here at HeffCap believe the rally has further to run, particularly for copper, which will benefit from rising investment in new energy sectors.
Copper is at the highest in 10 yrs, fueling bets it will rally further to take out the record set in February 2011.
Steel demand is surging as economies chart a path back to growth just as the world’s biggest miners have been hampered by operational issues, tightening ore supply.
The long-term prospects for metals prices are good and point to higher prices in the next few yrs.
Also, Trafigura Group and several major Wall Street banks including Goldman Sachs Group Inc. and Bank of America Corp. expect copper to extend gains.
Copper for 3-month delivery rose 1.4% to settle at $10,092/tonne on the London Metal Exchange (LME)
Benchmark spot iron ore prices rose to a record, while futures in Singapore and China climbed too.
The boom comes as China’s steelmakers keep output rates above 1-B tonnes a yr, despite production curbs aimed at reducing carbon emissions and reining in supply. Instead, those measures have boosted steel prices and profitability at mills, allowing them to better accommodate higher iron ore costs.
Spot iron ore with 62% content hit $201.15/tonne Thursday. Futures in Singapore jumped as much as 5.1% to $196.40/tonne, the highest since contracts were launched in Y 2013. In Dalian, prices closed 8.8% higher.
Tin climbed as much as 2% to $30,280/tonne on the LME, boosted by rising orders for the soldering metal. Tin is at the highest since May 2011, with a 48% gain this year making it the best-performing metal on the LME.
Have a healthy day, Keep the Faith!