LME Copper Inventory Levels Getting Lower, May Soon Be a Shortage

by MetalMiner IndX Reports on May 28, 2014

Style:    Category: Metal Prices, MetalMiner IndX, Non-ferrous Metals

Data released in the past week suggests copper inventories might be much tighter than expected, The Financial Post reported.

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“With copper concentrate exports from Indonesia still in limbo, Chinese copper demand apparently quite healthy, and reports that China’s State Reserve Bureau purchased 200,000 tons of copper in recent months, the much discussed 300,000-ton 2014 surplus may have just disappeared,” Greg Barnes, analyst at TD Securities, told the FP.

Data released by the London Metal Exchange shows copper inventories have dropped below 200,000 tons, the lowest level since October 2008. Mr. Barnes notes that on-warrant copper inventory, which is metal that is actually available to the market, is down to only about 100,000 tons, the lowest amount since May 2008.

On Tuesday, May 27, the day’s biggest mover was the cash price of Japanese copper, which saw a 0.9 percent increase to JPY 744,000 ($7,301) per metric ton. The price of US copper producer grade 110 steadied at $3.87 per pound following two-days of increases. The price of US copper producer grade 102 ended a two-day climb, settling at $4.06 per pound. The price of US copper producer grade 122 flattened at $3.87 after two days of improvement.

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Chinese copper closed mixed on Tuesday. The price of Chinese copper bar declined 0.2 percent to CNY 51,380 ($8,237) per metric ton. The cash price of Chinese copper weakened by 0.2 percent, settling at CNY 51,580 ($8,270) per metric ton. At CNY 50,600 ($8,112) per metric ton, the price of Chinese copper wire was essentially unchanged. For the fifth day in a row, the price of Chinese bright copper scrap remained essentially flat at CNY 44,300 ($7,102) per metric ton.

Following a two-day rise on the LME, the copper 3-month price flattened at $6,918. The cash price of primary copper ended a two-day climb, settling at $6,990 per metric ton on the LME.

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