Copper has gained around 10% since the start of 2017. China comprises 45% of global consumption, and so prices of the red metal tend to track the prospects for Chinese industrial activity. These have brightened in recent months thanks to government stimuli.
Traders are also pencilling a bounce in global growth following a Trump stimulus. Strikes in Chile mean a tenth of copper production capacity “could be out of action soon”.
But don’t count on high prices lasting, says Capital Economics. Markets are over-optimistic about Trump’s stimulus, and the Chinese authorities, mindful of the ever-growing debt pile, are unlikely to keep stimulating growth.