Industrial copper is a deep slump because of low inventories show toughness|plumbers tools

 

 

 

For industrial metals, September is a tough month, metals prices all fell sharply.
The main reasons for this decline is that markets increasingly nervous about China's real estate market, because it is the backbone of China's economic growth in recent years, is one of the most important thrust of global demand for metals.
Most affected are the most eye-catching is iron ore. Iron ore in 2009, its lowest level since the current price. Iron ore is not only one of the products most affected by the slowdown in construction activity in China, and the iron ore markets are struggling to digest the Australian Pilbara region rising supply.
But by China's slowing economic growth concerns and US dollar double down on the London Metal Exchange (LME) weakness in base metals prices also came to prominence. LME index. LMEX has fallen nearly 5% since September 8.
LME metals is undoubtedly the most toughness of copper in CMCU3, according to Wednesday's close at $ 6,742 per ton, copper decreases over the same period, "only" is 3.6%.
That's pretty strange, because, like copper and iron ore, to a large extent dependent on Chinese demand growth; in addition, along with the rebound in output end the systemic shortfalls after years, the surge in the supply of copper.
But unlike iron ore was yet to see clear signs of supply surplus of copper. Inventories remain at very low levels, and LME Copper stocks are basically determined by an entity in control.
Looking forward to feasting, but starving, it is the portrait of the characteristics of the copper market for months, in which before tensions eased, the copper market for bears are dangerous.
** Inventory low and concentrated **
Three of the world's major stock exchanges, LME, New York commodity exchange (COMEX), and the Shanghai Futures Exchange (SHFE) copper stocks amounted to 265,000 tons.
Inventories grew slightly the past few months, taking into account the northern hemisphere summer is low season in the manufacturing sector, this growth is not surprising. Copper inventories are very low by any historical standard.
Stock Exchange once sustained at this low level was in 2008, when copper is located above the $ 8,000 a tonne.
Furthermore, nearly half of the world in LME Copper inventories are kept in the United States New Orleans warehouse, registered warehouse 132,025 tons, accounting for 85% of the total LME.
The same number control in the hands of an entity, LME Copper prices in recent months has been suppressed for weeks.
LME latest position report shows, there is a single market participants result available inventory, meaning non-cancelled warehouse receipt 122,850 tons. Add to this the spot entry, its grip on the available inventory climbed to more than 90%.
Such large positions triggered the LEM auto loan provisions, which attempted to hand positions that extend forward as empty, can become less painful.
Target spot contract it could be relatively three-month difference between the price shocks, but remains relatively benign reasons, as spreads for counter spread on Wednesday to $ 36.50.
** Mystery of Chinese stock **
Of course, visible inventory is just one piece of the overall inventory.
A large part of the bonded warehouse in China's inventory, mostly as collateral for shadow of the credit industry in China.
The view was expressed that acts like copper LME price difference is the LME bears can use.
Qingdao port scandal that theory has been challenged, and expose the vulnerability. Official investigation commodities warehouse receipts obtains loans pledged repeatedly to messages just when copper prices fell, in anticipation of hundreds of thousands of tons of copper from the bonded warehouse in China go to the London Metal Exchange (LME) warehouses in Asia.
But this did not happen.
Many copper transferred to the hands of well-known warehousing operators in China, very few were shipped abroad.
In addition, bonded stock now on the decline. No precise figures, but Reuters reported at the beginning of September, Shanghai bonded inventory in August reduced by 50,000-100,000 tons to 500,000-550,000 tons.
This is by far the copper market is a curious thing.
China has been absorbing copper concentrate. As China smelter processed, refined copper output in August hit a record high. But imports have been declining. Shanghai Futures Exchange inventories will fall sharply.
This suggests strong demand from China. But other signs indicate slowing demand, especially with lots of metal housing and manufacturing.
A major buyer of copper – national grid has its own investment cycle, it may offset weak demand in other sectors.
Or it may be China's State reserve Bureau copper bonded warehouse released was quietly absorbed. China's State reserve Bureau is the world's most opaque part of the inventory.
Most clear is that China, like the rest of the world, there were no concrete signs of excess.
** Seller alert **
Most analysts still believe material surplus into refined copper surplus are just a matter of time.
In August, China's refined copper processing record, suggesting that this process has begun.
But looking at the inventory, especially before the LME inventories began to significantly increase copper prices for other metals that have impacted Chinese slowdown fears are relatively resistant.
Short sellers need to take into account the Bulls have an enormous impact on inventory and price differences.
But this confrontation is based on whole elusive long/short global copper glut

For industrial metals, September is a tough month, metals prices all fell sharply.

 

The main reasons for this decline is that markets increasingly nervous about China's real estate market, because it is the backbone of China's economic growth in recent years, is one of the most important thrust of global demand for metals.

 

Most affected are the most eye-catching is iron ore. Iron ore in 2009, its lowest level since the current price. Iron ore is not only one of the products most affected by the slowdown in construction activity in China, and the iron ore markets are struggling to digest the Australian Pilbara region rising supply.

 

But by China's slowing economic growth concerns and US dollar double down on the London Metal Exchange (LME) weakness in base metals prices also came to prominence. LME index. LMEX has fallen nearly 5% since September 8.

 

LME metals is undoubtedly the most toughness of copper in CMCU3, according to Wednesday's close at $ 6,742 per ton, copper decreases over the same period, "only" is 3.6%.

 

That's pretty strange, because, like copper and iron ore, to a large extent dependent on Chinese demand growth; in addition, along with the rebound in output end the systemic shortfalls after years, the surge in the supply of copper.

 

But unlike iron ore was yet to see clear signs of supply surplus of copper. Inventories remain at very low levels, and LME Copper stocks are basically determined by an entity in control.

 

Looking forward to feasting, but starving, it is the portrait of the characteristics of the copper market for months, in which before tensions eased, the copper market for bears are dangerous.

 

** Inventory low and concentrated **

 

Three of the world's major stock exchanges, LME, New York commodity exchange (COMEX), and the Shanghai Futures Exchange (SHFE) copper stocks amounted to 265,000 tons.

 

Inventories grew slightly the past few months, taking into account the northern hemisphere summer is low season in the manufacturing sector, this growth is not surprising. Copper inventories are very low by any historical standard.

 

Stock Exchange once sustained at this low level was in 2008, when copper is located above the $ 8,000 a tonne.

 

Furthermore, nearly half of the world in LME Copper inventories are kept in the United States New Orleans warehouse, registered warehouse 132,025 tons, accounting for 85% of the total LME.

 

The same number control in the hands of an entity, LME Copper prices in recent months has been suppressed for weeks.

 

LME latest position report shows, there is a single market participants result available inventory, meaning non-cancelled warehouse receipt 122,850 tons. Add to this the spot entry, its grip on the available inventory climbed to more than 90%.

 

Such large positions triggered the LEM auto loan provisions, which attempted to hand positions that extend forward as empty, can become less painful.

 

Target spot contract it could be relatively three-month difference between the price shocks, but remains relatively benign reasons, as spreads for counter spread on Wednesday to $ 36.50.

 

** Mystery of Chinese stock **

 

Of course, visible inventory is just one piece of the overall inventory.

 

A large part of the bonded warehouse in China's inventory, mostly as collateral for shadow of the credit industry in China.

 

The view was expressed that acts like copper LME price difference is the LME bears can use.

 

Qingdao port scandal that theory has been challenged, and expose the vulnerability. Official investigation commodities warehouse receipts obtains loans pledged repeatedly to messages just when copper prices fell, in anticipation of hundreds of thousands of tons of copper from the bonded warehouse in China go to the London Metal Exchange (LME) warehouses in Asia.

 

But this did not happen.

 

Many copper transferred to the hands of well-known warehousing operators in China, very few were shipped abroad.

 

In addition, bonded stock now on the decline. No precise figures, but Reuters reported at the beginning of September, Shanghai bonded inventory in August reduced by 50,000-100,000 tons to 500,000-550,000 tons.

 

This is by far the copper market is a curious thing.

 

China has been absorbing copper concentrate. As China smelter processed, refined copper output in August hit a record high. But imports have been declining. Shanghai Futures Exchange inventories will fall sharply.

 

This suggests strong demand from China. But other signs indicate slowing demand, especially with lots of metal housing and manufacturing.

 

A major buyer of copper – national grid has its own investment cycle, it may offset weak demand in other sectors.

 

Or it may be China's State reserve Bureau copper bonded warehouse released was quietly absorbed. China's State reserve Bureau is the world's most opaque part of the inventory.

 

Most clear is that China, like the rest of the world, there were no concrete signs of excess.

 

** Seller alert **

 

Most analysts still believe material surplus into refined copper surplus are just a matter of time.

 

In August, China's refined copper processing record, suggesting that this process has begun.

 

But looking at the inventory, especially before the LME inventories began to significantly increase copper prices for other metals that have impacted Chinese slowdown fears are relatively resistant.

 

Short sellers need to take into account the Bulls have an enormous impact on inventory and price differences.

 

But this confrontation is based on whole elusive long/short global copper glut

 

 

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