LONDON, Jan 17 (Reuters) – Copper has begun the New Year on a surge, with funds piling back into the market in anticipation that China’s rapid emergence from a year of lockdowns will translate into recovering demand in the world’s largest metals buyer.
London Metal Exchange (LME) three-month copper broke back up through the $9,000-per tonne level last week for the first time since June. Currently trading around $9,130, the copper price is up by 9.6% since the start of January. The rally has been driven primarily by shifts in fund positioning on both the LME and the CME with the bulls back in town and bears in retreat.
Investors played copper from the short side for much of last year, if they were prepared to engage at all. Rolling lockdowns in China, an energy crisis in Europe and aggressive rate hikes in the United States were all good reasons to give Doctor Copper a wide berth.
The funds’ sudden return is a sign that many are betting on a much sunnier outlook.
BULLS BACK IN TOWN
Money managers have rapidly accumulated long positions on the CME copper contract this month, lifting bets on higher prices by 32% to 65,703 contracts, according to the latest Commitments of Traders Report.