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Copper Is Crumbling After Stockpiles Surge

After reaching one month highs on Monday, copper futures prices have tumbled to near 3-week lows amid slowing China credit impulse-driven economic signals (PMIs weak) and a surge in LME stockpiles.

  • *LME COPPER STOCKPILES JUMP 12%, MOST SINCE MARCH 9

And the market reacted…

Additionally, as Bloomberg reports, There are also more signs of slack spot demand: immediate delivery copper’s discount to the three-month contract on the LME has widened 28 percent this week. Bigger inventories and the loosening of the copper price curve are at odds with forecasts that the copper market will move into deficit this year, Leon Westgate, an analyst at Levmet U.K. Ltd., said by phone.

“Judging by the price action and the movement in the spreads, it looks like the market might have been anticipating these deliveries,” he said.

As Guy Wolf, a London-based analyst at Marex Spectron Group, noted:

“It is about whether the tide of liquidity is going in or out, not the latest anecdote about Chinese demand or comment from a Chilean union official.”

“We think we’ll see a more sizable slowdown out of China,” says Edward Meir, an analyst at INTL FCStone in NY
“We’re a little bearish on copper for May”

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