One of the highest prominent copper bulls has returned to expecting new price records, draining the Donald Trump threat with definitions on global stocks and creates what he sees unprecedented opportunities to achieve profits.
Article content
(Bloomberg)-One of the highest prominent copper bulls has returned to the expectation of new price records, draining Donald Trump's threat to definitions on global stocks and creates what he sees unprecedented opportunities to achieve trading profit.
Article content
Article content
Kostas Bintas has become one of the most famous mineral dealers during his years in building a copper book in Trafigura in the largest in the world, before his departure in late 2023. Now he leads a batch to minerals at Trader Mercuria Group Ltd.
Advertisement 2
This announcement has not yet been downloaded, but your article is continuing below.
Article content
Pinas said in an interview that the huge quantities of minerals that are pulled to the United States would leave the rest of the world – decisively in China, short consumers – in an interview.
“We believe that there is an exceptional thing that happens in the copper market,” he said. “Is it unreasonable to expect a copper price of $ 12,000 or $ 13,000? I am struggling to put a number on it because this has not happened before.”
BINTAS was one of the first variety of merchants and investors to predict that copper was about to enter a multi -year bull market in the wake of the Corona virus's pandemic, and that the increasing demand for electrification will outperform the growth of the supply. In Mercuria, collaborated with another prolific bull: Nick Snowden, Goldman Sachs Group Inc.
However, the bulls were disappointed at several occasions, the last of which was last year when prices rose to a record above 11,000 dollars per ton, only to stumble as Chinese buyers' retreat from the market.
Now, the disturbances of Trump's threat changed the dynamic drivers in the market. Although the United States has not yet imposed a wide tariff on copper imports, domestic prices have risen to more than 1400 dollars per ton over the rest of the world, which creates a major incentive for merchants to charge every ton of reserves for the United States.
Article content
Advertising 3
This announcement has not yet been downloaded, but your article is continuing below.
Article content
“In terms of margins for the ton, I have never seen a better trading opportunity,” Penas said.
Penas said that the transfer of inventory into the United States means that the Chinese copper market will be left with insufficient shares. Chinese buyers – who represent more than half of the global demand – will compete with the American market. At the same time, large quantities of scrap copper that usually flowing from the United States have dried up.
“China has historically succeeded in rejecting high prices,” Penas said. “This is the first time in the modern history that another market brings out on the Chinese market. For this reason, it is an unlimited area.”
Mercuria estimates that about 500,000 tons of copper are heading to the United States, most of which are already on the way. This compares with regular monthly imports of about 70,000 tons. Traders ship the metal for opportunistic profit from the large price difference, as well as the shipments that were already planned to remove customs before imposing any possible tariff.
Mercuria itself has 85,000 to 90,000 tons on its way to the United States. Bloomberg previously stated that some traders have redirect the shipments of Asian customers to the United States.
Advertising 4
This announcement has not yet been downloaded, but your article is continuing below.
Article content
Penas is not alone in his upscale call. Investment funds raised their net positions at LME COPPER to the highest level since last May, according to exchange data. David Lily, CEO of the hedge Fund, Drocaud Capital Manager, expects that the withdrawal of copper to the United States will let the Chinese buyers face “more aggressive competition for minerals.”
Global copper prices have already increased sharply, as standard LME prices have increased by 12 % so far this year to $ 9.85.50 per ton on Friday, and the future of the United States on Comex, which was amplified due to the tariff threats, with a record approach.
The global market shows some signs of distress, but not yet indicates the extreme pressure you expect by Bintas. On the future Shanghai Stock Exchange, Copper moved to the widest delay in more than a year, with the trading of contracts near the contracts that were raised later in reference to the narrow supplies. Copper installments have risen in China since the end of February, although they remain at modest levels according to historical standards.
Of course, prediction can be undermined by increasing the high price of copper if fears that the trade war may cause a global economic slowdown.
Advertising 5
This announcement has not yet been downloaded, but your article is continuing below.
Article content
MERCURIA is not interested in this danger, expecting that global demand will outperform the offer by 320,000 tons this year, which, as well as withdrawing stocks to the United States, can drain a large share of stocks outside the United States.
Moreover, the threat of customs tariffs causes copper scrap exports from the United States to dry. About a third of global copper production comes from scrap, and scrap flow is often a temporary store store, height when prices are high and decrease when they are low.
“Indeed, until February, American scrap exports went to small levels,” said Snowdon, head of mineral research at Mercury. “You see a shock that is not appreciated in the global copper market through this scrap channel.”
Article content