Comments on: Forward Copper Prices Rising, China Inventory Still High

By: SAM

SAM — Fri, 20 Nov 2009 07:18:04 +0000

Have you noticed the supply of all the metals on the LONDON METAL EXCHANGE they are going through the roof.If the US dollar just has correction up the prices of all metals will drop like a rock.

By: stuart

stuart — Wed, 18 Nov 2009 16:28:50 +0000

Hi Derek, Thank you for the comments. Nickel and Zinc have also been the subject of some stockpiling, Iron ore was also purchased speculatively in the first half 2009 although there is less evidence that is happening now. Copper is the “best” metal for such activity though because the value is comparatively high so storage costs are proportionally low and the market is highly liquid meaning the material can be easily sold when the position is unwound.
We have heard anecdotal evidence of all kinds of companies getting into physical stockpiling, even as extreme as farmers borrowing on their assets to fund physical hoarding but its only the larger insitutions that would have access to the futures market to play the forwards curves.

By: derek

derek — Wed, 18 Nov 2009 15:39:09 +0000

Stuart, very interesting insight and comments. Other than copper, what other metals and natural resource goods are being stockpiled? Also, are general companies (that are not metal trade houses) allowed to participate in metal speculation?