Komfie Manalo, Opalesque Asia: The world's second biggest mining company Rio Tinto Group has accused hedge funds of playing a "dangerous game" with copper prices, and said that the metal is "not trading on fundamentals."
In an interview in London with the Sydney Morning Herald, Rio Copper and Coal chief executive Jean-Sebastien Jacques said, "There is lots of short-selling in copper and we've seen the pick up in terms of short-selling in copper on the back of what happened in China a few months ago."
Hedge funds have been shorting copper because of the glut in supplies.
China’s move to restrict sales in equities in August, following the devaluation of its currency, has forced funds to divert their bearish bets on the metal, said Jacques.
His statement reflects the earlier comments made by Glencore’s Ivan Glasenberg, who said that the market was being distorted and that the law of supply and demand would eventually dictate the price of copper. Copper prices fell 16% so far this year as the slowing Chinese economy affected demand.
China is the world’s biggest buyer of copper, accounting for about 40% of global demand. And consumption is slowing just as supplies are becoming more ...................... To view our full article Click here
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