SHANGHAI – The red metal is red hot. Copper surged to the highest level in more than two years on the London Metal Exchange, lifting shares of producers including Glencore, driven by expectations that increasing demand in China may fuel a global shortage and buoyed by a weak dollar.

Benchmark three-month futures rallied as much as 2.2% to $6 362.50 a metric ton, the highest level since May 2015, and were at $6 349.50 by 12:29 p.m. in Shanghai. That’s a fourth day of gains, and extends Tuesday’s 3.3% jump. In Hong Kong, Glencore rose as much as 4.5%.

Base metals have rallied in the past month as economists have become more upbeat about China’s economy, while concerns over tightening liquidity in the world’s top user have eased. Initial data for July have added to a positive picture. The advance has come as a gauge of the dollar trades around a one-year low, making materials priced in the greenback more attractive.

“The market is very heated at the moment,” Xu Maili, an analyst at Everbright Futures, said by phone from Shanghai. “There is an outbreak of bullish sentiment following recent good macro data in China.” Futures in Shanghai topped 50 000 yuan a ton for the first time since February.

The global copper market had a 65 000-t deficit in the first five months of this year, according to the World Bureau of Metal Statistics. There’s a similar picture from the International Copper Study Group, which estimated the shortfall at 53 000 t in April, paring the year’s surplus to just 80 000 t.

Freeport-McMoRan, the world’s biggest publicly traded producer, reckons further gains are likely. CEO Richard Adkerson said a looming deficit will benefit the company, with prices expected to hit $4/lb or higher, according to remarks on a conference call.

Aluminum also rallied on the LME amid speculation that China’s efforts to curb overcapacity will benefit prices. Futures in London advanced as much as 1.7% to $1 962/t, the highest price since May 26, and traded at $1 959. That followed Tuesday’s 0.9% climb.

LME nickel was flat after having closed at the highest level in three months after Philippine President Rodrigo Duterte on Monday threatened to impose more taxes on mining firms unless they take steps to protect the environment, reviving concerns about supply from the world’s top producer of mined nickel.