Why Copper Fever Is Breaking – by Enes Morina (Wall Street Journal/MSN.com – June 25, 2024)


Investors have piled into bets on a looming copper shortage this year. That itself is helping to ease the potential problem—and spoil the party for latecomers. Copper bulls, who have long touted the metal as an energy-transition play, appeared vindicated a month ago.

On May 20, spot prices on the London Metal Exchange hit a record of around $11,100 a metric ton in intraday trading, up 29% from the beginning of the year. The commodity’s starring role in what might have been the biggest mining deal in history, as industry leader BHP courted its peer Anglo American, only added to a sense that this was copper’s moment.

But the moment passed: BHP never made a firm offer, and the LME spot price is down more than 14% from its peak. One reason is that the spring run-up in prices was driven by speculators more than by users of copper. From the start of April to mid-May, copper futures in New York surged by 26.4% as traders and commodity trading advisors, or CTAs—many of which use algorithms to follow market trends—bet on a supply deficit.

For the rest of this article: https://www.msn.com/en-us/money/markets/why-copper-fever-is-breaking/ar-BB1oQWbQ