The Municipal Treasury is reviewing Prudence Holt’s 14-page recommendation to secure forward contracts for approximately sixty per cent of Phase 1 copper requirements at current market prices.

The recommendation, delivered to Deputy Treasurer Annabel Whitford on Tuesday, represents the first concrete step toward resolving the commodity risk that has shadowed the Veridan Corridor tramway project since the Kaelmar crisis drove copper above 890 florins per tonne in February. Copper closed on Friday at 652 — the thirty-fourth consecutive decline — and the arithmetic has become simultaneously more attractive and more complicated.

At the original 740-florin baseline, the tramway’s copper allocation was 380 million florins. At 652, a full purchase would cost approximately 335 million — a saving of 45 million florins. But the point of hedging, as Holt’s report apparently makes clear, is not to buy everything at once. It is to buy enough at a known price that the project is insulated from a reversal.

The recommendation, understood to counsel forward contracts at current prices for roughly 7,200 of the project’s 12,000-tonne Phase 1 copper requirement, would lock in savings of approximately 63 million florins against the 740-florin baseline for that portion alone. The remaining 40 per cent would be purchased on the spot market during construction, capturing further declines if they materialise — or absorbing modest increases without breaching the contingency.

Holt, 58, a partner at Greaves & Holt Financial Advisory who has advised three municipal authorities on commodity procurement, was engaged by the Treasury in early April after the Continental Rating Agency’s “Satisfactory, Conditional” rating specified a copper hedging strategy within sixty days as one of its conditions for the bond offering.

The formal bond offering is expected in May. Three of six financial institutions have submitted expressions of interest. The hedging strategy is, in effect, the last unfilled page in the prospectus — a page that, unlike the one left blank for the rating agency’s verdict, requires the Treasury to make a decision rather than wait for one.

Clement Varga, senior commodities analyst at the Fernwich Trading House, observed that the thirty-four consecutive declines in copper — from 891 on 24 February to 652 on Friday — represent one of the longest sustained falls in exchange history. “The market has priced in peace, priced in the corridor, and is now pricing in abundant supply,” he said. “But markets reverse. The question is not whether copper will fall further. The question is how much risk the city is prepared to carry.”

The Treasury is expected to announce its decision before the end of the month.