LONDON: Copper hovered near record highs on Wednesday as expectations of strong demand in a lower carbon economy and a recovery from the pandemic in Western nations lured fund buying.

Three-month copper on the London Metal Exchange (LME) was up 0.1% to $10,475 a tonne by 1610 GMT. The dollar firmed after stronger than expected US inflation data, taking the shine off base metals prices.

The price was not far off Monday’s record high of $10,747.50 for the metal that is used in power and construction.

Copper prices have doubled in the last year, fuelled by a rebound in demand from top consumer China and other economies after a COVID-19 induced slump.

The metal’s conductive qualities make it an attractive buy for investors seeking to capitalise on the expansion of electrification in transport and industry.

Robin Bhar, an independent consultant, said copper was now in striking distance of $11,000 per tonne, which was the “latest magnet for the market” even though there was caution over the price overheating.

“The market likes the story of the green industrial demand for copper and you have the supply side issues that are also supportive,” he said, referring to a possible tax in Chile that could dent long-term output and potential strikes at BHP mines.

Funds have raised their bullish bets on LME and Comex copper, according to estimates by broker Marex and the US Commodity Futures Trading Commission.

“Whilst we recognise the potential for metals to correct we remain of the opinion there are only two positions to be held in our space: long or flat,” said Marex’s Alastair Munro.

The eurozone economy is expected to rebound better than expected, while Britain’s pandemic-battered economy grew more strongly than expected in March.

Headline copper stocks in LME-registered warehouse have shed by about a third in the last month to 222,924 tonnes.

The LME cash contract traded at a $9 discount to the three-month contract, the widest since January and pointing to an easing in supply concerns.

Aluminium shed 1.2% to $2,490 a tonne, zinc was down 1.3% at $2,970, lead edged 1.4% lower to $2,190, tin eased 0.3% to $29,745 while nickel lost 0.7% to $17,805.