Flirting At 2-Yr Highs

COPPER PRICES have surged by $0.70/LB, an increase of 18.08% since the beginning of 2024, and are now at levels not seen since June 2022. Prices are reaching closer to $10,000 per metric tonne, last time it crossed the mark was in March 2022, when it hit a high of $10,845. The current rally is attributed to fears of production cuts in China and a growing demand, particularly from the green energy sector. As copper is a crucial component in vehicles, mobile phones, power lines, solar panels, and wind turbines, it plays a significant role in the transition to renewable energy. Given the current trends, prices are expected to climb further throughout the year with Goldman Sachs rerating its copper forecast to $12,000/tonne from $10,000/tonne.

Not Sweet Anymore

COCOA FUTURES have fallen to around $8,620 per tonne in May, following last month’s peak at $12,218 per tonne on April 19. Despite a sharp 20% drop in the last two sessions of April, the market remains highly volatile, influenced by severe liquidity constraints. However, the long-term outlook for cocoa prices remains bullish, fuelled by uncertainties over global supply and issues such as adverse weather, aging trees, and crop diseases in West Africa, a region that produces over half of the world’s cocoa.

On The Boil

ALUMINIUM PRICES have reached unprecedented highs, increasing by more than 20% since the beginning of the year from $2,160/tonne to $2,645/tonne. As a result prices of Indian aluminium, too, have gone up from ₹200 to ₹240. This surge is driven by heightened demand for industrial metals amid a resurgence of manufacturing activities in major economies, including the U.S. and China. Shares of major Indian companies such as Hindalco Industries and Nalco have hit lifetime highs, gaining 16-25% over the past month. Shares of Vedanta, the country’s largest aluminium producer, are up 48% over the same period, indicating robust profit in store for commodity sellers.