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Copper trades near 15-month high as Citi sees ‘explosive’ growth

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China’s factory activity beat expectations in March, the latest sign of an economic recovery in the world’s largest copper user. Data showing increased spending also suggests domestic consumption is gathering pace.

During the bull market of the 2000s, copper rose more than fivefold in three years, driven by urbanisation and industrialisation in China. Citigroup said there’s potential for “explosive price upside” again in the next three years.

There’s been a series of production setbacks at mines around the world, which has compounded concerns around a lack of fresh supply. The dearth of new projects is “finally starting to bite,” Bank of America strategists said. The bank expects copper to average $US12,000 a ton by 2026.

Other base metals rose, with zinc adding as much as 2.4 per cent as Chinese smelters become the latest casualty of overcapacity in the country’s metals markets.

Bloomberg