Copper and industrial commodities rally to fresh records on improving demand outlook

Industrial commodities have been enjoying an explosive year so far, with prices flirting new multi-year highs, supported by the optimism around the successful vaccine rollout, and the global economic recovery.

Institutional investors have increased their bullish bets on Copper and other base metals since the global demand has surged to pre-pandemic levels coupled with the largest supply deficits in a decade.

Copper, which is the king of the industrial metals, has rallied towards 4.50 dollars per pound, hitting its highest level since 2011 over strong demand from China and supply constraints in Chile.

Most recently, Goldman Sachs has called Copper as the “new oil”, since the red metal will play a key role in the decarbonisation of energy systems and especially in the development of the electric vehicle market.

Electric vehicles use about four times as much copper as traditional internal combustion vehicles, while renewable energy uses five times as much copper as traditional fossil fuel power generation.

Climbing to fresh record highs, industrial commodities such as Iron Ore, Aluminium, Platinum and Lithium have been the best indicators for the recovery in the global manufacturing and construction activity after the pandemic.

Finally, Palladium climbed to 3.000 dollars per ounce for the first time, getting support from the robust industrial demand from the automotive sector, the reflation bets, and the weaker US dollar.