Veriton Investment

Copper Tops $13,000 as Trump’s Jabs at Fed, Allies Boost Metals

(Bloomberg) -- Copper rallied above $13,000 a ton, part of a broad-based surge in metal markets that’s being aided by a weaker dollar as investors rotate away from currencies and sovereign bonds.

The industrial metal advanced as much as 3.4% to $13,187.50 a ton on the London Metal Exchange, nearing all-time highs struck earlier this month, while nickel jumped nearly 5% and tin surged 9.7%.

Most Read from Bloomberg

White House Ballroom Architect Reveals New Trump-Requested Features

Tokyo Becoming Colony for the Rich, Pritzker Winner Warns

New York City’s Worst Highways Can Lead Somewhere Better

NYC Bans Hidden Hotel Fees Ahead of World Cup Tourist Influx

Achieving ‘Transportation Abundance’ Is All About Density

US President Donald Trump’s shakeup of the geopolitical order and renewed attacks on the Federal Reserve are spurring a flight to safety. The Greenland crisis in particular has sent the dollar on course for its worst week since June due to the unpredictability of US policymaking. The weakness in the greenback lifted both base and precious metals.

That’s adding further impetus to copper, which has been on a tear since the middle of last year on major mine disruptions, booming demand from electrification and a surge in shipments to the US ahead of possible tariffs. Surging investor interest has added fuel to the metal markets rally, pushing gold toward record highs potentially topping $5,000 an ounce and silver above $100 an ounce.

While benchmark copper prices rose, spreads between different contracts remained loose on the London Metal Exchange as deliveries to warehouses in the US and Asia helped ease pressure on buyers after a sharp squeeze earlier this week.

Spot copper traded at a discount of $66.06 a ton to the LME’s three-month benchmark on Friday, in a market structure known as contango, pointing to improving supply conditions. That was a sharp shift from Tuesday, when it was more than $100 in backwardation, the opposite market pattern signaling tightness.

Inflows into Asian warehouses were partly fueled by deliveries from Chinese smelters booked earlier when the arbitrage trade was profitable, according to traders.

Chinese smelters have stepped up exports via deliveries to LME warehouses this year after gains in benchmark prices outpaced domestic rates, as a slowdown in the property sector dragged down consumption. More deliveries are expected in the coming weeks, though the arbitrage window is currently closed, the traders said.

Copper rose to settle at $ a ton on the LME. All other industrial metals advanced.

--With assistance from John Deane and Yvonne Yue Li.