Copper hit a record price of 10,000 USD per ton on Thursday on the back of growing worldwide economic optimism and concerns about the impact of an Australian cyclone on stretched global supplies.
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.
Copper prices continue to soar, reaching another milestone this morning of 10,000 a ton, said Ian O'Sullivan, an analyst at traders Spread Co. in London.
”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.
But the key drivers have been the strong PMI manufacturing numbers out of the US, Europe, and especially China, the world's largest consumer of copper.
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 Organisation for Economic Co-operation and Development (OECD) region.
Copper is being propelled by tight global supplies of the industrial metal, which is used in plumbing, heating, electrical and telecommunications wiring.
In related news a report from Bank of America Merrill Lynch indicates that copper prices in 2011 could average 11.250 US dollars per ton even in a scenario will weaker Chinese demand.
“Copper prices experienced a sharp rise in the second half of 2010, and in 2011 copper prices have remained somewhat range-bound. To blame is a weak physical market partially on a lack of Chinese buying ahead of the nation’s New Year celebrations in February”, however subdued price momentum at the outset of the first quarter is not unusual says the Global Commodity Research team at Bank of America Merrill Lynch.
Yet, we believe that copper will ultimately resume its uptrend as fundamentals strengthen. This has also been mirrored by our Pressure Indicator, which has recently issued a “buy” signal on a raft of supportive macro economic data from China, but also from the US concludes the report.