Copper and aluminium prices at multi-year highs. Here’s why
Copper and aluminium, the most used industrial metals, have gained substantially in the past few weeks. The rally was associated with supply uncertainties and a notable increase in global demand. The Western ban on Russian metals, hopes of US rate cuts, and diversification of holdings of central banks also uplifted the sentiments.
Copper futures are hovering near lifetime highs in the key Chinese markets, while they are trading at two-year highs on futures platforms like LME and MCX. Aluminium prices are currently at record levels in Indian markets, gaining over 20 percent since the start of the year.
A resurgence of manufacturing activity in the world’s largest economies like the US and China is attributed to a surge in demand for industrial metals.
The US manufacturing activity witnessed the first expansion in March after a contraction of 16 months. Manufacturing numbers in the country surprisingly jumped to 50.3 against the expectation of 48.4 in the latest month.
China’s manufacturing PMI data also showed a positive trend. The PMI numbers in the country rose to 51.1 in March, which was the fifth straight month of growth in the country.
A turnaround in manufacturing activity in the world’s leading commodity consumers indicates a revival in demand for industrial commodities, especially copper and aluminium, which are the most widely used base metals worldwide.
In addition, there are concerns over supply bottlenecks. Recently, the US and UK implemented new sanctions on Russian metals including copper,
