George Soros, the highly successful financier who runs the Quantum Fund, and Julian Robertson, the hedge fund manager who is responsible for the Tiger fund, have emerged as being among the clear winners in the copper market's tug-of-war. Following revelations by giant Japanese trading house Sumitomo that it had incurred US$1.8 billion of losses through unauthorised copper trading, its senior trader Yasuo Hamanaka was sacked, ending the two-way pull in the market which had hitherto defied fundamentals. It is now expected that copper could be in for a sharp fall in the medium term as the continuing oversupply of the metal combines with the existing copper stock overhang to send prices lower. Traders confirmed yesterday that Sumitomo's extensive long positions seemed to have compelled Mr Hamanaka to try to support the market, but he had been constantly thwarted in his attempts by the short positions taken by the hedge funds, which were effectively on the other side of Mr Hamanaka's bets on the market. 'With Mr Hamanaka out of the equation, the funds are able to let their influence gain more sway in the market,' one trader said. 'They take a view that the market should be trending lower,' Rajat Kohli of MC Securities in London added. However, in the short term, traders expect the market to move sluggishly in either direction before confidence fully returns. 'In the near term there will be uncertainty and very nervous conditions,' Angus MacMillan of Billiton Metals in London said. 'Until the dust settles on recent developments, we are still unsure what short positions there are in the market, and what has still got to be liquidated.' The extent of the fall in the copper price once fundamentals start playing a larger role in the market could be substantial. Trading at around 95 cents per pound, some players estimate that copper could fall as far as 75-80 cents per pound. 'The question to be asked is to what extent did Hamanaka's positions prop up the market?,' Mr Kohli said. That uncertainty was reflected in yesterday's prices in both London and New York, which drifted around $2,000 per tonne and 95 cents per pound, despite the London Metal Exchange reporting a 17,025 tonne fall in inventories.
