Copper prices soared to record highs in Asian trade on Monday, growing a recent rally fueled by a Comex short squeeze and raised bets on tighter markets this year.

On the London Metal Exchange, one-month copper futures surged 0.9% to $5.1370 a pound, approaching record highs. While three-month copper futures increased 0.8 percent to a record high of $10,848.50 a tonne.

The red metal has surged in value in recent weeks due to stimulus programmes in China. The world’s largest importer, and growing optimism about reduce interest rates this year.

Investing in copper was also fueled by bets on tighter supplies. Which came amid China’s refiner cuts and stronger sanctions against Russian metal exports.

However, the largest catalyst for the red metal’s rise was a short squeeze that occurred last week on the Comex Exchange. Where substantial purchases of long-term copper contracts drove up prices and shook those holding short positions in the metal.

Amidst the squeeze last week, the United States copper futures saw a sharp increase, and traders were observed rushing to secure copper supplies for the July contract’s delivery.

Expectations that decreased mining output will not be able to meet the demand for copper in the upcoming years. Particularly in light of the global push towards electrification and green energy, drove long positions on the metal.

Bullish wagers were also increased by stimulus measures in China, the largest copper importer in the world.

To support the real estate industry, the nation significantly relaxed regulations. Last week, a massive issuance of 1 trillion yuan ($138 billion) in bonds was started.

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