Copper prices have raced to eight-year highs as global economic recovery fuels demand for the metal.
On the London Metal Exchange last week, copper rose 5 per cent to peak at $2,727 a tonne. The metal has now broken through the levels reached just before prices tumbled after the Sumitomo copper trading scandal began to unfold in May 1996.
The price spurt has been driven by China's seemingly insatiable demand for raw materials, which has led to supplies falling to dangerously low levels.
"It's not panic time, but it is certainly disquieting," said Tony Warwick-Ching, copper consultant for CRU, the commodities research group.
In the past 15 months, China has emerged as the world's largest consumer of copper.
Global inventories have halved since late 2002, to less than 900,000 tonnes. Mr Warwick-Ching said prices were also boosted by last week's remarks by Alan Greenspan, chairman of the US Federal Reserve, who told Congress that there were encouraging signs for capital spending and manufacturing.
The copper consultant said global copper inventories equate to about six weeks supply - down from a ratio of eight weeks this time last year - and moving towards four weeks worth of supply based on the current rates of consumption.
Prices have also been underpinned by production problems at the world's biggest copper mine, Grasberg in Indonesia, which is operated by Freeport McMoRan, and at Escondida in Chile, where the world's second biggest copper mine has been struggling to reach its full capacity.
Against this backdrop, analysts are forecasting copper prices to scale greater heights by the end of June. Michael Lewis, head of commodities research at Deutsche Bank, said: "It appears increasingly probable that the price highs of $3,100 a tonne set in 1995 will be exceeded."
The fall in the US dollar to long-term lows against other leading currencies has also helped to propel copper and other commodity prices higher.