Copper futures are testing the crucial psychological level of $3 as the industrial metal rallied more than 2% on Tuesday. Copper prices are being driven by the Chinese recovery and stronger demand, as well as a sliding US dollar. The red metal has been on a tear since May, advancing more than 20%. How much higher can copper prices go in the second half of 2020?

November copper futures rose $0.072, or 2.48%, to $2.9735 per pound at 16:51 GMT on Tuesday on the New York Mercantile Exchange. Copper has surged nearly 4% over the last week, lifting its year-to-date gain to more than 6%.

Investors have turned bullish on copper prices because of the Chinese recovery going full steam ahead. The manufacturing and industrial sectors are rebounding, the yuan is appreciating against the greenback, and copper imports are skyrocketing.

According to the General Administration of Customs data, Chinese unwrought copper imports soared 81% from the same time a year ago to 762,211 tons. During the first seven months of 2020, imports are trending at around 22 million tons on an annualized basis. Imports have also totaled 3.6 million tons, poised to top 2018’s record of 5.3 million tons.

Independent consultant Robin Bhar told Reuters that the industrial metals are taking their cues from the broader financial market.

“The metals also seem to be keeping lock step with the stock markets, which in turn are taking their cue from the massive fiscal and monetary stimulus, which is ongoing.”

Next week, manufacturing and non-manufacturing purchasing managers’ index (PMI) readings will be published. The market is penciling in another month of expansion.

Meanwhile, the greenback continues to trend lower as the US Dollar Index, which measures the buck against a basket of currencies, plunged 0.59% to 92.30 on Tuesday. The index has cratered more than 7% since May, bringing its year-to-date loss to 4.25%. A weaker greenback is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.

In other metal commodities, December gold futures surged $19.80, or 0.99%, to $2,018.50 per ounce. September silver futures tacked on $0.518, or 1.87%, to $28.185 per pound. September platinum futures picked up $6.00, or 0.62%, to $973.60 an ounce. September palladium futures dipped $3.20, or 0.14%, to $2,230.60 per ounce.