Copper sprinted to a record peak at the key psychological level of $10,000 (U.S.) a tonne on Thursday as investors bet that supply shortages and buoyant demand growth this year would keep fuelling a rally.
Copper, a benchmark industrial metal used in power and construction, has already surged more than 60 per cent since last June when financial and commodity markets tumbled on fears of sovereign default in euro zone countries such as Greece.
"There are worries about copper supplies and about the deficit this year," said Barbara Lambrecht, analyst at Commerzbank. "Economic data from the United States and China have helped sentiment this week."
A recent Reuters survey showed the consensus was for a copper market deficit of 444,000 tonnes this year.
Benchmark copper on the London Metal Exchange was trading at $9,980 a tonne at 1003 GMT. The metal used widely in power and construction closed at $9,945 on Wednesday. (The price you see on Globe Investor is quoted in U.S. cents per pound.)
Sister industrial metal tin, mainly used in solder for electronics, also extended its rally to a all-time peak of $30,900 per tonne.
Copper's rally was reinforced by data from the U.S. Institute for Supply Management on Tuesday, which showed the U.S. manufacturing sector grew at its fastest pace in nearly seven years in January.
The United States is the world's largest economy and the second largest copper consumer after China which accounts for nearly 40 per cent of global demand estimated at 21 million tonnes this year.
In China, an official PMI index and another one compiled by HSBC gave different results, but analysts said taken together the two surveys painted a picture of sticky inflation and a moderate slowdown in the world's second-largest economy after 10.3 per cent growth last year.
"All told Chinese growth is still very strong and even if it slows, its demand for copper is unlikely to fall much. They still have a lot of infrastructure projects ongoing and the new five-year plan won't change that," a LME trader said.
China's next "five-year plan" will cover the "key period" of 2011-2015. It will be the 12th plan since the ruling Communist Party came to power in 1949.Report Typo/Error
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