(Bloomberg) -- Copper soared to a fresh all-time high as optimism about a global rebound from the pandemic boosts commodities markets.The metal -- an economic bellwether -- is front and center in a rally that’s driven raw materials from lumber to iron ore to multiyear highs or records. Stimulus measures and vaccine rollouts are fueling prospects for a resurgence in demand that’s set to strain supply, while copper’s crucial role in the green-energy transition is expected to underpin longer-term gains.At the same time, a lack of mine investment may leave the market short of the supply needed to meet demand. Big banks and others including trader Trafigura Group have rolled out a list of lofty price targets that suggest there’s more room to run, with the latter predicting copper will hit $15,000 a ton in the coming decade.The surge in raw materials is also stoking fears of inflation, and questions are building around the need for a response from central banks. While policy makers from the Federal Reserve on down maintain that cost increases are temporary, some businesses are already announcing they’ll need to raise prices.Futures in London charged past the 2011 record -- set around the peak of the last commodities supercycle -- and kept going, rising to as high as $10,440 a ton, even after a disappointing U.S. jobs report on Friday.“If inflation induces tighter policy it would hurt copper,” said Ryan McKay, an analyst at TD Securities. But “the weaker jobs report this morning highlights the economy is certainly not running too hot right now.”Federal Reserve officials reiterated this week that U.S. inflation is unlikely to get out of control despite the unprecedented government spending that’s been authorized in response to the pandemic.Copper rose 3.2% to settle at $10,417 a ton at 5:51 p.m. in London. Prices are up more than 30% this year and have more than doubled from lows in March of last year.It’s not just copper. Steel prices across Asia and North America are booming, iron ore is at a record above $200 a ton as miners struggle to keep up with the frenzied pace of consumption, and tin topped $30,000 for the first time in a decade. The Bloomberg Commodity Spot Index jumped to its highest since 2011 as growth bets boost demand, while poor weather hurts crop prospects and transportation bottlenecks crimp supplies.China RiskThere are risks to the rally, especially if the current strong period of manufacturing starts to ease. In China, the top consumer, signs are emerging that high copper costs are starting to bite, and authorities have pledged to stabilize raw-material prices.China’s imports of copper ore and concentrate fell in April from the previous month, according to customs data released Friday. Some manufacturers and end-users have been slowing production or pushing back delivery times after costs surged, Shanghai Metals Market said last week, while weaker-than-expected domestic consumption has opened the arbitrage window for exports.With China’s strategic stockpiles, “they could ease price pressures by selling if they needed,” said TD Securities’ McKay. “But I think this hot run in copper will only be short-term, and other forces such as the peaking Chinese credit supply and fiscal drag in the U.S. will weigh on the metal longer term.”Higher prices means substitution could accelerate, Bank of America Corp. analysts including Michael Widmer said in a note this week. That could come by reducing copper content in applications, as well as engineering out of copper in products.Short SupplyReal shortages of raw materials that power the economy are driving current gains in commodities as much as anticipation of future demand, according to Greg Sharenow, who manages a portfolio focused on energy and commodities at Pacific Investment Management Co. The global copper market will flip into a deficit this year as demand jumps 6%, according to Bank of America.Read more: Biggest Copper Supplier Is Giving Bulls Another Reason to CheerThe commodity surge has also sent the miners soaring. Freeport-McMoRan Inc., the biggest publicly traded copper miner, is at the highest in almost a decade, while Rio Tinto Group is trading near a record high, propelled by iron ore and copper prices.Yet, while the biggest miners are universally bullish on the outlook for copper, there are few new projects on the horizon, constraining future supply. Ivan Glasenberg, the billionaire boss of Glencore Plc, said Thursday that prices would have to hit $15,000 a ton to incentivize enough new supply to meet demand.More broadly, capital expenditure on copper mining operations is expected to increase only marginally this year -- to $16.2 billion from $15.2 billion in 2020 -- and remain around that level for the next two years, Australia & New Zealand Banking Group Ltd. forecasts.“The copper market as it currently stands is not prepared for this demand environment,” Goldman Sachs Group Inc. analysts including Nicholas Snowdon wrote in a report last month. The “combination of surging demand and sticky supply has reinforced current deficit conditions and foreshadows large open-ended deficits from mid-decade,” they wrote.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.