Aluminium also rebounded, rising by as much as 4.3% and set for its biggest daily gain since October 2018.

Benchmark copper on the London Metal Exchange (LME) was up 2.3% at $9,250.50 a tonne at 1724 GMT, moving towards last week’s 10-year high of $9,617.

The metal used in power and construction shot up 15.5% in February as more analysts predicted price rises and speculators piled in.

“Sentiment is still very bullish out there,” said Commerzbank analyst Daniel Briesemann. But the rally is running ahead of fundamentals and copper will end the year lower, he added.

Speculators are bullish, with a net long position in LME copper equal to 62% of open contracts by Thursday, the most since 2004, brokers Marex Spectron said.

On the Shanghai Futures Exchange (ShFE), speculators’ net longs reached 57.9% of open contracts on Friday, the most since 2003, before falling to 51.8% on Monday, Marex said.

GOLDMAN: “The fundamental outlook for copper remains extremely bullish,” Goldman Sachs analysts wrote in a note, predicting stellar returns on commodities.

“We continue to forecast the largest deficit in 10 years in 2021 (327,000 tonnes), followed by an open-ended phase of deficits,” they wrote. “To reflect the rising probability of scarcity pricing, our 3/6/12M copper targets increase to $9,200/$9,800/$10,500/t.”

The premium for cash copper over the three-month contract is about $45 and trending higher, pointing to tight nearby supply.

Chile’s copper output edged down 0.7% year-on-year in January to 457,100 tonnes as strong output at Codelco was offset by weaker results at the Escondida mine.

LME aluminium was up 4.2% at $2,219.50 a tonne, near a 2-1/2 year high of $2,243 reached last week, with analysts at Citi saying supply issues would see prices average $2,350 in 2022 and $2,500 in 2023. Benchmark zinc was 1.1% higher at $2,847 a tonne, nickel rose 0.2% at $18,715, lead gained 0.2% to $2,077 and tin was up 3.8% at $24,345.