LONDON, May 15 (Reuters) - London copper touched a more than two-year high on Wednesday, aided by a weaker U.S. dollar and bullish demand outlook, while prices on the CME hit a record high.
Three-month copper on the London Metal Exchange (LME) rose 2.1% to $10,320 per metric ton by 1001 GMT after hitting $10,401.25, its highest since April 2022.
Copper, used in power and construction, is up 21% so far this year and is $525 away from the record high of $10,845, hit in 2022, due to limited supply of raw material this year and bets that the metal would benefit from additional demand from the green energy sectors.
"Copper prices are underpinned by a softer dollar, positive investor positioning and supply side downgrades. However, China demand signals remain mixed," said Standard Chartered analyst Sudakshina Unnikrishnan.
China's macro indicators have been turning positive but
micro indicators for copper remain soft in the top metals
consumer, with low import premiums
Meanwhile, the CME May contract jumped 4.5% to a record high of $5.178 a pound. Copper producers and traders have been shipping more metal to the United States to profit from higher prices for CME futures compared with LME.
"CME copper seems to be short squeeze on people trading arbitrage LME vs CME, SHFE vs CME," said a trader. Arbitrage trading exploits differences in regional prices for the same commodity.
The U.S. currency weakened making dollar-priced metals more attractive for buyers using other currencies. The focus was on a key U.S. inflation report due later in the day.
LME aluminium advanced 1.5% to $2,589.50 a ton, zinc moved 0.6% higher to $3,020, lead rose 1.4% to $2,290, tin climbed 3.3% to $34,265 and nickel gained 1.3% to $19,320. (Reporting by Polina Devitt; additional reporting by Siyi Liu; editing by Alexandra Hudson)
