LONDON, March 27 (Reuters) – Funds have dumped their bets on higher copper prices as the turbulence triggered by the collapse of Silicon Valley Bank continues to roil financial markets. Early-year enthusiasm for copper as a proxy for China’s re-opening from stringent lockdown has succumbed to the contagious fear spreading from the banking sector to other risk asset classes.
The investment community has turned net short of CME copper for the first time in five months, while funds have cut their long exposure on the London Metal Exchange (LME). Investors’ negativity towards Doctor Copper contrasts with the bullish headlines generated by the FT Commodities Global Summit.
Copper, currently trading in London around $8,900 per tonne, could surpass its previous March 2022 price peak of $10,845 and hit $12,000 this year, according to Kostas Bintas, co-head of metals at trade house Trafigura.
Goldman Sachs is also expecting higher prices, arguing that the pace of global inventory draws could reduce visible stocks to an all-time low of 125,000 tonnes by the end of the second quarter.
For the rest of this column: https://www.reuters.com/markets/europe/funds-dump-copper-amid-financial-market-turbulence-2023-03-27/