Copper jumps to highest level in nearly 10 years. Wall Street pros believe there's more upside

Published Mon, Apr 26 202111:38 AM EDTUpdated Mon, Apr 26 202112:31 PM EDT

Copper rose to its highest level in nearly a decade on Monday, as a jumpstart in global manufacturing pushes demand for the metal higher. Copper advanced more than 1% to trade at $4.4265 per pound — its highest level since August 2011 — after turning in three straight weeks of gains. "Copper is possibly still in the early stages of a super commodity cycle," said Ed Moya, market analyst at Oanda. "Copper has been bolstered by a trifecta of reasons: The global economic recovery is mostly accelerating higher and massive infrastructure spending and green initiatives are driving copper demand through the roof," he added. Moya also pointed to tightening supply conditions and a weaker dollar as additional catalysts supporting copper's ascent. Over the next few years, Oanda sees prices rising as high as $12,500 per metric ton. Among other uses, copper is integral to the energy transition. Copper's electrical conductivity and low reactivity are among the factors that make it the most cost-effective material for use in storing and transporting renewable energy. It can be used in cables, batteries, transistors and inverters, among other things. Analysts at Goldman Sachs recently called the metal the "new oil," noting that there's "no decarbonization without copper." Earlier this month, the firm raised its forecast for copper, and now sees it averaging $11,000 per metric ton over the next 12 months. By the end of the decade, the firm believes copper demand from renewable energy-focused initiatives will jump nearly 600%. Under Goldman's bull case scenario, demand will surge 900%. The metal has gained more than 10% in April, and is on track for its sixth positive month in seven. Jeff Kilburg, founder and CEO at KKM Financial, noted that copper's rise signals economic optimism. "Copper provided leadership in the depth of the pandemic 'market sell-off' last March and again copper is providing leadership in Q2 2021 underscoring the optimism associated with the reopening of our global economy," he said. Amid the economic recovery, a surge in steel demand should also lift copper. BCA Research recently upped its forecast for copper, and now sees the metal hitting $5 per pound by the end of the year. The firm's prior forecast was $4.50 per pound by December. "Over the medium (to end-2025) and the long terms (2050) significant new supply will have to be developed to meet demand," said Bob Ryan, chief global macro strategist at BCA research. "Economic growth in Asia (including China) and ex-Asia is, unsurprisingly, cointegrated with copper prices — i.e., economic growth and industrial commodities share a long-term equilibrium, which explains their co-movement," he added. For investors looking to take advantage of copper's run, two funds that track the space are Global X Copper Miners and United States Copper Index Fund . - CNBC's Michael Bloom contributed reporting.

The smelter is melting copper on July 23, 2020 in Jinhua, Zhejiang, China.

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Copper rose to its highest level in nearly a decade on Monday, as a jumpstart in global manufacturing pushes demand for the metal higher.

Copper advanced more than 1% to trade at $4.4265 per pound — its highest level since August 2011 — after turning in three straight weeks of gains.