LONDON, May 20 (Reuters) – Copper’s lightning rally to record highs may not be sustainable in the coming weeks, with action concentrated on the shipment of material to cover exposed short positions in the U.S. Comex futures market rather than tepid demand in top consumer China.
Prices on the CME Group’s Comex hit a record last week, while benchmark copper on the London Metal Exchange (LME) rocketed on Monday to an all-time peak of $11,104.50 a metric ton, having surged 28% so far this year.
Analysts say copper’s long-term fundamentals are strong, with a bullish outlook attached to firm demand in coming years for applications including the global clean energy transition and greater use of artificial intelligence (AI). That is set against constrained supply, prompting a race among miners for high quality projects.
The current run higher appears to be on shaky ground, motivated by heavy speculative activity and a dash to cover large short positions – which can be bets on lower prices, or producers hedging their output – taken by traders.
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