Copper prices in London reached a two-year high on Friday, briefly testing the key $10,000 per metric ton level, as BHP Group’s $39 billion bid for Anglo American sparked concerns about potential supply constraints.
Three-month copper on the London Metal Exchange (LME) rose 0.9% to $9,950.50 per ton by 1629 GMT, after peaking at $10,033.50, its highest level since April 2022. Copper prices in Shanghai also hit a record high.
The proposed takeover of Anglo American by BHP, the world’s largest mining company, has heightened investor focus on the copper supply outlook. Copper is a crucial raw material for power and construction, and the prospect of a supply squeeze has intensified fund buying in the market.
“Speculation over supply shortfalls in copper are pushing prices to new highs. At the same time, investors are turning optimistic about demand from the green energy sector. BHP’s bid for Anglo American highlights the looming supply squeeze,” said ING commodities analyst Ewa Manthey.
Other factors contributing to the price surge include tight spot copper treatment charges in top consumer China and investors adding fresh long positions for four consecutive weeks, according to Dan Smith, head of research at Amalgamated Metal Trading.
However, Smith warned that copper may struggle to maintain current elevated price levels in the coming months, as net speculative positions are now high compared to historical ranges, and the discount for LME cash copper over the benchmark three-month contract is rising, indicating potential easing of supply tightness.
In other metals, LME aluminum, nickel, and lead prices also gained, while tin and zinc edged lower.