A surge in hedge fund investments signals growing confidence in the copper market, as fund managers position themselves for potential gains in 2024. Tribeca Investment Partners, Terra Capital, and Anaconda Invest are among the funds expressing optimism, citing supply dynamics as a key driver for potential price increases.
The bullish sentiments follow recent supply setbacks in copper production, transforming what seemed like an excess supply situation into a potential deficit. Todd Warren of Tribeca emphasizes the strength of the trade ahead, attributing it primarily to the supply challenges faced by the industry.
Despite the closure of key mines in the past year, copper gained only 2% in 2023, following a 14% decline in 2022. However, hedge funds foresee a turnaround in 2024, with some experts predicting at least a 50% upside in prices by the end of the year.
Prominent figures in the industry, such as Pierre Andurand and Robert Friedland, share their optimistic outlooks on copper prices, expecting a rise despite challenges faced in the previous year. Terra Capital and Tribeca are actively increasing their copper stock holdings, reflecting a shift in expectations from surplus to a significant deficit.
The longer-term appeal of copper is highlighted, with its crucial role in supporting technology for the green transition. Despite environmental concerns related to mining, copper appears to be a more reliable investment compared to traditional transition assets like wind and solar.
Investors are eyeing opportunities in the copper market, anticipating sustained bullish trends due to growing demand and constrained supply. The ongoing pursuit of increased copper exposure by commodities companies suggests a positive outlook for the metal in the coming years.v
