Chart of the day is.....

...LME copper warehouse inventories, five year period.


Today's chart because a certain reader is surely all happy it went under 400k this week. Yeah P, I mean you :-)

Copper inventories

In the last few days, up days have been cut with down over at the LME inventory, which is a typical rollover pattern for stocks.

Feb 14th is Chinese New Year, tigers will be burning bright (in the forests of the night) for a week or so, then the drawdown will start in earnest. May you live in interesting times and may you do your own DD, dude.

Chart of the day is.........

.....LME copper warehouse inventories:

Hateful, aren't I? All you want to do is to ignore things like "reality" and keep enjoying this bull run that WE ALL KNOW WILL NEVER EVER END and here's me prodding at your ribs with the pointed stick of Cu warehouse numbers again.

Elephant? Meet room.

Canary? Meet coalmine.

Charts of the day are....

...those boring copper elephant-in-room fundy thingies again. LME inventories are at a six month high and show no signs of stopping.

Here's the context

And here's the price chart

The only way that copper can perform the way it's been performing is as a hedge against the dollar. And copper isn't an asset class, folks! Never has been, never will be (unless this time is different, of course) and so the equal/opposite type reaction you see from copper can only be temporary. Put simply copper isn't gold, so anyone that puts the word "copper" next to the phrase "safe haven" in the same sentence should immediately be dropped from your list of advisors. Cos sooner or later that person is heading for a fall...happens every time.

UPDATE: Thursday's LME inventory number is just out, up 4,800MT to 402,125MT. But don't worry, it's just fundies. Party on Garth.

Copper news

LME Week is here again (my how time flies) and here, from some RBS flunkey, is the best quote from the copper suits I've seen so far in their week of spotlight (in bold).

"The world economy is by no means out of the woods, but in our view the theme during LME Week will be the prospect of demand recovery in 2010," Royal Bank of Scotland said in a note.

"Yet we would still urge producers to be very cautious about embarking on price induced as opposed to demand induced reactivation."

This can be put into real English thusly: "There's an awful lot of idle supply waiting to jump back in, but if it does copper will sink so don't screw the roost and start ramping back up, pleeeeeeease.... cos I want my bonus".

Demand, eh? Supply, he said? My, the oldskool words are back in fashion! So how is that demand coming along (inquiring minds etc)? According to some flowery named dude over at Nexans:

"If you look at the physical market I see pretty depressed prices over the coming months. Prices are likely to fall this year and part of next year. It really depends on when growth will pick up."

The same note then goes on to point out an inconvenient truth or two, such as:

At the end of May, 21% of all copper in LME warehouses was booked for delivery. Today, the proportion is 2.6%.

With LME copper inventories now at 347,375MT and climbing, it really doesn't look very good from the underlying demand.


As the JP Morgan flunkey puts it (quoted in the FT):

Michael Jansen, of JPMorgan, said that he expected increases in metals stocks would be a "significant hurdle" to further price gains.

DYODD, dude.

Am I still allowed to be bearish on copper?

Ok, so Olympic Dam looks like taking 50KMT off the market in the near future, but where does it rate as an influence compared to end user demand, or the dollar?

Here's the LME inventory chart (6 month):


Here's the same period price chart

Here's the spooky Reuters report that tells you about the nerves on the demand side

Here's the USD chart (hey look, it held 76)

Copper

Here's the latest LME inventory number (which shot up over 340,000MT late last week):

Here's the five year inventory:
Here's the spot price over the same period.


Is the rise in inventories and the reversal of copper prices related?

Is the Pope Catholic?

Do bears tend to defecate in woodland areas?

Chart of the day is.........

....LME inventories of copper...just for a change, eh?

Here's the five year chart for context.

It comes with this quote from Reuters this morning:

"We're bound to recover at some point but for the next six to 12 months anything can happen. Demand isn't great and there is excess material out there," said an LME-based trader.

Translation: "WTFDIK? But hey, buy anyway..what could possibly go wrong, suckaz?

Copper Inventories

Yeah I know, it's like one of those itches you can't stop scratching. Here's the latest LME inventory (Monday 14th Sept number, out a few minutes ago).....

......and 300,000 is getting left behind fast.

"Err.....like thanks Doctor.....it was a great party dude.....but like I gotta run now, y'know.....don't wanna stay too long....."

Copper inventories

Here's the 30 day chart...
...here's the long range chart for context....

...and rather than repeat myself til blue in face, here's someone talking to Reuters in the excerpt below that does the job for me today. But it's all scaremongering right? Things never go down in the market...they always go up...right?

"A rise of nearly 25 percent in copper stocks since early
July has been troubling investors, who are wary of a correction
in the price, which rose to an 11-month high at the end of
August. [ID:nL8550447]

 "When you break down the rises, most of them come from
warehouses in Asia. There's no demand and Chinese are not buying
and the open interest has completely tumbled at the end of
August," said Andrey Kryuchenkov, analyst at VTB Capital.

 In a sign demand remains sluggish, the premium for copper
ready for use is now around $32.50 a tonne versus the usual
premium of $80-$100, said a trader in Shanghai who expects
demand to pick up from November for the end-of-year surge.

LME copper inventories about to break through 300,000MT

Here's the chart as stands today, with the latest LME number hot off the press:

Add to this the first inventory climb in Shanghai for nine days (up 1.7% to 19,656MT) and the rise over at COMEX, up 228 short tons to 53,209 tons. For sure, these smaller warehouses aren't as important as big daddy LME but the trend is clear in all places, this despite lower than expected recent copper production in the world's two biggest export countries, Chile and Peru.

DYODD, dude.

UPDATE: Nervous copper longs send anonymous messages to Otto, hiding their fear and loathing of his superior economics skills behind mockery.

Copper levels up a bit lately.. STOP PRESS! LOL Otto, come on.. it was at 550,000 tonnes this February and now it is at 300,000.. it's a natural swing. I expect the spot to retrace to around 2.40-2.50 before another run up. Didn't you say it was ready for a pullback around 2-2.20? That was over 30% ago. We know you are bearish on copper but you were plain wrong. Let it go.

Chart of the day is...

...LME warehouse copper, now over 294,000MT

Just keeps on creeping up, dudettes and dudes.

UPDATE: Bloomberg wins the "Headline of the Day" award with this one:

Copper Stockpiled by China’s Pig Farmers May Be Sold (Update2)

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