On Friday, the price of copper climbed above $4 per pound for the first time since September 2011.
The base metal is used in many construction materials, including electrical wires and water pipes. The uptick is being driven by short and long term optimism for the commodity due to both strong expected demand and supply constraints.
China is an important puzzle piece for copper prices because it’s such a big consumer of the metal. Demand is so high that inventories there are at their lowest level in nearly 10 years, according to commodity analysts at BCA Research.
The BofA analysts think prices can rise above $4.54 “at some stage.”
The main risk to copper’s success story is a delay to the reopening of the economy caused by hiccups in vaccine efficacy or a renewed increase in infections.