“Copper is one of the more interesting metals. On our [Marex’s] estimates we have seen some extreme speculative length, but more recently it is flat,” Wolf said at the LME Asia Week seminar in Hong Kong.
“Positioning being flat in copper at the moment is a positive thing: the bus moves faster when it is empty,” he said.
“I believe there is going to be a really long bull market – but a different bull market to a last one,” Wolf said.
He noted that last year’s market was down to the sheer force of growth from China which allowed a quicker but very strong bull market, "whereas this year we will see the bull market run for much longer".
“It will never look that great and along the whole way people will say it is unsustainable so no-one will invest. But it will be a long, shallow, bull market,” Wolf said.
The London Metal Exchange three-month copper price closed at $6,862 per tonne on Thursday May 18. It hit a high of $7,218 per tonne on January 16 with the metal trading between $6,800 and $7,000 per tonne for most of the year.
Wolf expects metals prices to climb "way higher than anyone ever imagines" as metals reap the rewards of critical changing market factors.
“In my opinion one of the reasons why commodities were so unloved a few years ago was because in a world of no income a negative carry asset became unattractive,” he said.
“But that becomes less of a factor as income rates rise – we will see a flood of money as yields rise.”
For example in nickel, Wolf says the health of the market is very strong and is in a good position to push higher this year.
“I think the electric vehicle story is a red herring, the time frame it will actually impact the market is a long way away. But it is good for psychology,” he said.
“Self-perpetuation is not a bad thing and when you look at the transactional pattern behavior, there is still aggressively more buyers than sellers – it is relentless.”
Nickel prices surged hit their highest since December 2014 earlier this year at $15,875 per tonne when the metal rallied over 10% in a matter of minutes.
The LME three-month nickel price was most recently trading at $14,745 per tonne.
Wolf admits there is a current lull in zinc, with the original reasons for bullishness filtered out, but says the metal "still has a case".
“The best time to bet on a bull market is when everyone doubts it,” he concluded.
The outlook for base metals is a positive one, with copper ready to push into a long period of bullishness, said Guy Wolf, Marex Spectron’s global head of market analytics.