Hedge fund manager Pierre Andurand anticipates a significant increase in copper prices, expecting them to nearly quadruple to $40,000 per tonne in the next few years due to rising demand and dwindling global stockpiles. This forecast has contributed to the impressive recovery of his $1.3bn Commodities Discretionary Enhanced fund, which has surged 83 per cent this year after a substantial loss last year due to unsuccessful oil investments. Andurand attributes the potential copper price surge to increased demand driven by the global energy transition, encompassing electric vehicles, renewable energy projects, and other technological advancements.
Despite copper’s current price of $11,000 per tonne, Andurand believes the rally will continue as supply struggles to meet demand. He predicts that it will take over five years for supply to catch up, citing industry estimates that new mine development typically spans 15 years. Additionally, Andurand pointed to miner BHP’s bid for Anglo American as an indication of the difficulties and expenses associated with developing new supply.
Reflecting on his past predictions, Andurand acknowledged that his forecast of oil prices reaching $140 per barrel did not materialise, even with conflicts in Ukraine and the Middle East. He noted that the current Brent crude price is $81.50 per barrel, significantly lower than its peak in September. Andurand expects oil prices to remain stable, as geopolitical risks have not impacted supply.
Since its inception in June 2019, Andurand’s fund has achieved an annualised net return of 34 per cent. Besides copper, he remains optimistic about other commodities, including cocoa, which saw a price surge earlier this year, and aluminium, which he predicts will continue to rise due to its potential as a substitute for copper.
Jubilee Metals Group plc (LON:JLP) is a diversified metal recovery business with a world-class portfolio of projects in South Africa and Zambia. The Company’s expanding multi-project portfolio across South Africa and Zambia provides exposure to a broad commodity basket including Platinum Group Metals, chrome, lead, zinc, vanadium, copper and cobalt.
