LONDON: One of the highest-profile copper bulls is back predicting new price records, as Donald Trump’s threat of tariffs drains global stocks and creates what he sees as unprecedented opportunities for trading profit.
Kostas Bintas became one of the best-known metals traders during his years building Trafigura Group’s copper book into the world’s largest, before his departure in late 2023.
Now spearheading a push into metals at energy trader Mercuria Energy Group Ltd, he is again calling for copper to surge to record highs, up by as much as a third from current levels.
The huge amounts of metal being drawn into the United States will leave the rest of the world, and crucially, top consumer China, perilously short, Bintas said in an interview.
“We think there is something exceptional happening in the copper market,” he said.
“Is it unreasonable to expect a copper price of US$12,000 or US$13,000? I’m struggling to put a number on it because this has never happened before.”
Bintas was one of the first of a growing chorus of traders and investors to predict that copper was about to enter a multiyear bull market in the wake of the coronavirus pandemic, and that rising demand for electrification would outpace supply growth.
At Mercuria, he’s teamed up with another prolific bull: former Goldman Sachs Group Inc metals strategist Nick Snowdon, who roughly a year ago was forecasting average prices of US$15,000 a tonne in 2025.
Still, copper bulls have been disappointed on several occasions, most recently last year when prices surged to a record high above US$11,000 a tonne, only to falter as Chinese buyers stepped back from the market.
Now the dislocations caused by Trump’s threat of copper tariffs have changed the market dynamic.
While the United States has yet to impose broad tariffs on copper imports, domestic prices have soared to over US$1,400 a tonne above the rest of the world, creating a huge incentive for traders to ship every spare tonne to the United States.
“In terms of the margins per tonne, I’ve never seen a better trading opportunity,” Bintas said.
The shift of inventory to the United States means the Chinese copper market will be left with insufficient stocks, he said.
Chinese buyers, who account for more than half of global demand, will be forced to compete with the US market.
At the same time, the large volumes of scrap copper that typically flow out of the United States have effectively dried up.
“China has been successful historically in rejecting high prices,” said Bintas.
“This is the first time in recent history that another market is taking tonnes away from the Chinese market. That’s why it’s uncharted territory.”
Mercuria estimates that about 500,000 tonnes of copper is heading to the United States, most of which is already on the way.
That compares with normal monthly imports of about 70,000 tonnes.
Traders are shipping metal to opportunistically profit from the large price differential, as well as frontloading already-planned shipments in order to clear customs before any potential tariffs are imposed.
Mercuria itself has 85,000 to 90,000 tonnes en route to the US.
It was reported previously that some traders have been redirecting shipments from Asian customers to the United States. — Bloomberg
