Shares of Hindustan Copper surged more than 7 percent to a 52-week high of Rs 394 on the National Stock Exchange (NSE) in the morning trade as the price of the metal-edged closer to $10,000 a ton on expectations of a recovering global economy lifting the demand for industrial materials.
Metals have risen sharply recently buoyed by signs of improvement in manufacturing activity in the US and China, the world’s two largest economies, and stubborn inflation, attracting renewed wager on commodities.
Copper climbed a percent in early deals on April 22 to reach $9,970 a ton before trading at $9,950 by 9.55 am in Shanghai.
Copper prices considered an economic gauge, were also bolstered by apprehensions of a drop in production due to raw material shortages and optimism surrounding demand driven by the transition to green energy.
According to Antaike, a Chinese state-backed research firm, copper, gold, and other metals, which have seen significant increases this year, are set to rise further, driven by strong demand in China and amid global macroeconomic uncertainties.
Metals with solid fundamentals and ample liquidity are increasingly attractive to international financial investors amid diminishing expectations of US interest rate cuts, tensions in the Middle East, and the conflict in Ukraine, it said.
In a report in March, Jefferies said the fundamental outlook for copper is improving faster than the brokerage anticipated. Its analysts expect copper prices to surge significantly, as they anticipate an extended period of deficit in the metal market based on its supply and demand forecasts.
They said if growth in supply lags underlying demand, which it expects, then demand destruction will be needed for the market to balance.
This demand destruction, however, will require a significantly higher price for which the brokerage said the price of copper will need to rise enough to incentivize the development of new greenfield projects to meet global demand.
At 10.42 am, Hindustan Copper shares were trading 4.8 percent higher at Rs 381.85 on NSE. So far this year, the stock has rallied over 40 percent, outperforming the benchmark Nifty, which has gained around 2 percent during the period.
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