U.S. and London copper prices scaled fresh multi-month highs on Wednesday as speculators extended buying on expectations that U.S. tariffs will be slapped on the metal.
Benchmark three-month copper on the London Metal Exchange (LME) rose 0.5% to $9,955 a metric ton by 1520 GMT, its highest since October 8.
Most active May copper futures on the U.S. Comex exchange climbed 1.2% to a 10-month high of $5.08 a pound.
U.S. President Donald Trump’s 25% tariffs on steel and aluminum products took effect last week and he has also ordered an investigation into potential new tariffs on copper.
Systematic funds that use computer analysis were leading the buying on the market largely based on surging momentum as technical levels are broken, a trader said.
Some investors were buying base metals and selling ferrous metals or oil in relative value trades, Alastair Munro at Marex said in a note.
Some analysts warned, however, that the high copper prices were not supported by supply/demand fundamentals.
“We’ve still got this pressure to get as much stuff as possible across to America. The copper arb (arbitrage), which we quote, that’s continuing to blow out,” said Dan Smith, head of research at Amalgamated Metal Trading.
The premium on Comex copper over the LME price widened to a record $1,236 a ton, surpassing a record peak hit on Tuesday.
“I’m actually quite nervous about what’s going to happen in three to six months’ time because I think a lot of this is rather artificial,” Smith said.
Curbing gains was a stronger dollar index, which makes commodities priced in the U.S. currency more expensive for buyers using other currencies.
Zinc was the worst LME performer, slipping 1.4% to $2,923 a ton after Boliden said on Tuesday it was commissioning an upgrade of its Odda zinc smelter to boost capacity to 350,000 tons a year from 200,000.
Among other metals, LME aluminum rose 0.4% to $2,665 a ton and nickel climbed 0.8% to $16,380 while lead dipped 0.3% to $2,088 and tin shed 0.7% to $34,995.