LONDON, July 18 (Reuters) – Copper’s electrical conductivity makes it a core component of the green energy transition, whether it be in the form of solar panels, electric vehicles or wind turbines. As far as analysts at Citi are concerned, all this makes copper “THE bullish energy transition trade within commodities.” (“Commodities Strategy”, July 17, 2023)
Except no-one appears to have told the fund community, which continues to give Doctor Copper a wide berth. Copper’s bull narrative of looming supply shortfall as investment in new mine capacity fails to match the green demand booster has been put on hold.
Rather, funds are taking their short-term cue from global manufacturing weakness, first and foremost in China, the market’s traditional demand driver. Despite the conspicuous absence of investor participation, London Metal Exchange (LME) three-month metal is still trading at a relatively elevated $8,430 per metric ton.
Which begs the question of where it might be if funds were collectively to buy into the green copper story.
CHOPPY COPPER
Money manager net positioning on the CME copper contract has been flipping between long and short in recent weeks as LME copper chops around in a $8,140-8,870 range.
For the rest of this column: https://www.reuters.com/markets/europe/funds-dont-buy-into-doctor-coppers-green-credentials-2023-07-18/