With bullish investors flocking in and bearish bets unraveling, London copper prices have soared to record levels, with nickel prices surging nearly 8%, marking significant volatility in the industrial and precious metals market for the week.
The global benchmark copper contract on the London Metal Exchange rose by 2.8% on Friday, coming close to the historical high set in March 2022. Copper prices in New York and Shanghai have already hit historic highs this week, as global markets are being squeezed by shorts centered around the New York Mercantile Exchange (Comex).
Precious metals also saw significant gains on Friday, with silver soaring to its highest point in 11 years and gold rebounding to the historical peak set in April. Phil Streible, Chief Market Strategist at Blue Line Futures, mentioned that the strong upward momentum in copper is spreading to silver, as silver is also considered an industrial commodity used in products like solar panels. The key factors affecting commodities are supply, demand, and price momentum, all of which silver currently possesses.
Industrial metals and precious metals have seen substantial increases this year due to a surge in investor interest, improved macroeconomic conditions, and tightened supply in various physical markets.
Matthew Heap, Portfolio Manager at Orion Resource Partners, stated in an interview that while many western funds missed out on the rebound in gold, they are now showing a great interest in copper investments. This reflects a clear narrative surrounding copper, with the potential for a significant rebound in prices that can be explained even in an elevator ride.
Supply disruptions caught many traders off guard and fueled large price swings in the metal market. After protests in New Caledonia, the world’s third-largest nickel supplier, nickel prices on the London Metal Exchange surged by 7.9% on Friday, May 17th.
Al Munro, Basic Metals Strategist at London-based Marex, mentioned, “While there is talk about soft demand currently, we also have supply issues, as seen with copper and nickel. We are a futures market, talking about the future – enormous demand.”
On Friday, the Comex copper market showed new signs of tension as front-month contracts re-soared to the record set on Wednesday. There is currently a rush for metal purchases in the global copper market.
By Friday afternoon, copper trading on the London Metal Exchange was at $10,707 per metric ton, nearing the record of $10,845 set in 2022, with copper for delivery in July on the Comex jumping by 3.2%. Gold rose by 1.3%, silver by 3.7%. Stock prices for gold, silver, and copper also saw an increase.
