Copper prices hit 11-month high

Copper prices (HG=F) are at an 11-month high and are up more than 6% year-to-date. A big reason for the move is tightening supply.

Yahoo Finance's Ines Ferré discusses the price action in the video above.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Stephanie Mikulich.

Video Transcript

[AUDIO LOGO]

SEANA SMITH: Copper on the move to the upside this week, spiking to the highest level that we've seen for prices in nearly a year. Ines Ferre has a closer look at the movement that we're seeing here to the upside. Ines.

INES FERRE: Yeah, Seana. And we are seeing an 11-month high when it comes to copper futures. Let me show you on our YFi Interactive. These futures are measured in pounds and you can see today's action up more than 1 and 1/2%.

Look, a lot of this rally that we're seeing year to date, copper is up more than 6%, part of this has to do with a tightening in global mine supplies. A giant mine in Panama that shut down last year, worries of interruptions in Zambia as well. And then you have smelters in China that have been joining forces to combat a drop in processing fees, basically short of a coordinated production cut.

So all of this has been helping to drive up copper futures. And we are also seeing in the market some expectations that the Fed may be cutting rates in June. Whether that comes to fruition or not, that also can be influencing these copper futures.

Now, mind you, even though we have seen a run up in prices recently, you do have to be careful with what we're seeing with some of the stockpiles, which have been building. So there's some analysts are saying, if you don't see a reversal in the stockpiles and investors could be, sort of, questioning this recent rally. But investors that have-- or analysts that I've also been talking to have been saying, look, copper is very much needed for the energy transition. It's a very volatile commodity as we have seen, but there will be a lot more demand going forward with this transition, guys.

BRAD SMITH: All right, Yahoo Finance's own Ines Ferre tracking all things copper for us today. Ines, appreciate it.