Copper prices to quadruple on soaring demand, top commodity trader Andurand says

Hedge fund manager Pierre Andurand, one of the world’s best-known commodity traders, thinks the copper price rally has much farther to run and could nearly quadruple to $40K/metric ton in the next few years, as supply struggles to keep up with surging demand.

The French fund manager told the Financial Times on Friday that he believes demand for copper, which is set to play a core part in the global energy transition, will outstrip supply in this decade’s H2, causing prices to extend its 28% YTD surge to an all-time high of $11,104.50/metric ton earlier this week.

“We are moving towards a doubling of demand growth for copper due to the electrification of the world, including electric vehicles, solar panels, wind farms, but also military usage and data centers,” Andurand told FT.

Andurand also has a bullish view on other commodities, including aluminum, which he thinks will keep rising in price for similar reasons to copper, as it can be substituted for the red metal, but he no longer expects a large run-up in crude oil prices.

“The geopolitical risks such as Russia and Gaza have not had an impact on supply, so I think that is why the oil price has been relatively stable, and I expect it to remain that way,” he said.

U.S. copper futures fell this week for the first time after an eight-week winning streak, with the front-month May Comex contract (HG1:COM) -5.5% for the week to $4.7785/MMBtu.

Also, front-month May Comex gold (XAUUSD:CUR) ended -3.3% to $2,332.50/oz this week, and May Comex silver (XAGUSD:CUR) closed -2.3% to $30.330/oz.

ETFs: (NYSEARCA:CPER), (NYSEARCA:COPX), (OTC:JJCTF), (GLD), (GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)

Macquarie analysts say increased demand for copper globally is being offset by slower demand growth in China, which in turn is changing investor sentiment towards copper.

“Given current fundamental indicators, the move appears overdone and the risk of a sharp correction is very high, if not already under way,” the firm says.