Will the base metals rally last?
The price of copper, hit $7,000 a tonne last week, driven by soaring Chinese demand. Other metals are also on the way up. But can it continue?
Doctor Copper is in fine form, reports Tom Howard in The Times. The red metal hit $7,000 a tonne last week, a 28-month high. Used in everything from “electric vehicles to telecoms to water pipes”, it is a key gauge of the health of the global economy. Copper has gained more than 10% this year.
The principal cause has been soaring Chinese demand, says Andy Home on Reuters. Smelters are racing to keep up with a construction and infrastructure boom triggered by a stimulus. By October China had already imported more refined copper than it did during the whole of last year. Bulls are also banking on higher US demand if Biden passes green spending plans, adds Howard. Meanwhile, civil strife in Chile (see page 12) is contributing to supply disruptions; the country accounts for 30% of global copper supply.
Other metals are also shining, writes Will Horner in The Wall Street Journal. Tin has hit a 15-month high. Aluminium had lagged its peers thanks to a “glut” of stockpiles but is now rising. Close to 18-month highs, the metal has been lifted by robust global car demand and speculators banking on a catch-up rally. But don’t bet on an “out-and-out bull run”, cautions Capital Economics. Beyond China, the metals demand outlook remains shaky. The rally may have a bit further to run from here, but by 2022 ebbing Chinese stimulus could see prices heading back down.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Rachel Reeves faces £23 billion capital gains tax “black hole” – will she be forced to look elsewhere?
The fiscal watchdog has downgraded its forecast for capital gains tax revenues, leaving chancellor Rachel Reeves with £23 billion less than previously expected
By Katie Williams Published
-
Protests erupt in Turkey after the arrest of Erdogan's rival
Turkey's president has jailed his main political opponent, Ekrem Imamoglu
By Emily Hohler Published
-
Large cap stocks start to struggle – is it time for investors to reassess their focus?
Buying quality large caps worked very well last decade. A more volatile world will be a bigger challenge for these star stocks, says Cris Sholto Heaton
By Cris Sholto Heaton Published
-
How to generate income with fixed-interest investments
Public debt is overvalued, but other fixed-interest investments now look like a bargain, says Max King
By Max King Published
-
Three top-notch Taiwanese companies cashing in on the advent of AI
Opinion Eric Chan, investment director and co-manager of the Aberdeen Asian Income Fund, highlights three potential Taiwanese winners in the technology industry
By Eric Chan Published
-
Weight-loss drugs could revolutionise the economy – the investments to buy now
The new generation of weight-loss drugs are a boon for the overweight, but they also promise to change our relationship with food and revolutionise the economy
By Dr Matthew Partridge Published
-
Find tomorrow’s Asian giants while they are still smaller companies
Opinion Nitin Bajaj, portfolio manager of the Fidelity Asian Values trust, picks three Asian companies to invest in.
By Nitin Bajaj Published
-
AI will maintain Moody’s market lead, says Stephen Connolly
Opinion Veteran data provider Moody's has adapted well to the modern world, and is one of Warren Buffett’s longest-held investments
By Stephen Connolly Published
-
Is BlackRock World Mining gearing for a recovery?
Opinion After a frustrating year, BlackRock World Mining is positioned for growth and to capitalise on the sector's recovery
By Rupert Hargreaves Published
-
Should you limit exposure to US tech stocks?
An end to the AI boom would shake both US funds and global trackers. Here’s one way to trim exposure to US tech stocks
By Cris Sholto Heaton Published