Indications from China are that its huge copper inventory build is slowing ....as we've documented [Feb 9, 2010: China Copper Imports to Halve] And overnight we have some more confirmation of that as end demand is "weak" per the country's 2nd largest smelter. That said, our commodities markets seem to have very little to do with supply and demand anymore... it's all about financial innovation and making sure traders on a few desks can game the system. So perhaps copper can surge another 50% from here as the markets discount
- Copper demand in China, the world’s largest consumer of the metal, is “weak” because of lackluster consumption from the power industry, Tongling Nonferrous Metals Group Co. said.
- “From what we learned from our customers, copper demand is now weak,” Chairman Wei Jianghong said today in an interview in Beijing. Tongling is the country’s second-largest copper smelter. “About 60 percent of copper is used in the power industry, and our sales to wire-and-cable users reflected that demand is rather weak,” Wei said.
- Demand “isn’t very strong,” Li Yihuang, chairman of bigger rival Jiangxi Copper Co., also said today.
- Slowing demand in China may indicate stockpiles in the country may continue to climb after reaching the highest level in more than seven years in February.
- Copper stockpiles jumped to 149,478 tons for the week ended Feb. 26, 28 percent more than the week ended Feb. 12, according to the Shanghai Futures Exchange.
- “The demand is not very strong in the first place,” Jiangxi Copper Chairman Li said in Beijing while at the congress. “But a lot of people have long positions in the market, so I think in the first half of this year, copper prices will be good.”
- Traders say the bank decision will reshape the close-knit warehousing industry as Goldman Sachs and JPMorgan will control the depots where more than half of the LME’s registered stocks are held. The LME is the world’s largest metal exchange.
Rinse. Wash. Repeat.