While hedge funds have gone soft on copper, the metal continues to trade within striking distance of all-time highs, but whether this is as good as it gets or just the beginning of a supercycle for the bellwether metal is far from settled.
The uberbull camp – led by Goldman Sachs – has seen its ranks grow and the predictions of inveterate contrarians like Goehring & Rozencwajg Associates of $30,000 copper no longer seem outlandish.
Copper and mining’s central role in the green energy transition has been well documented and as BMO’s Colin Hamilton put it with exquisite understatement in a recent report:
“Copper has rarely been a market short in confidence about future fundamentals.”
With the demand picture going from rosy to crimson, the bulls have seized upon long-standing issues around copper supply to buttress their arguments.
Falling ore grades (G&R has a convincing argument that porphyries, responsible for 80% of global supply, are nearing a reserves cliff), decades of underinvestment in exploration and development, and the vexing role of scrap have underpinned price expectations for a long time.
For the rest of this article: https://www.mining.com/120-year-chart-shows-copper-price-supercycle-only-starting/