LONDON (Commodity news world): Builds in Shanghai Futures Exchange inventories of copper signals continued softness in the physical market, said Barclays Capital in a research note.
According to the bank, stocks are now at 221,487 metric tons, their highest level since 2002, the bank says. This suggests consumers are keeping buying to an “absolute minimum” due to uncertainty about future demand.
“This is also being reflected in SHFE spreads with the copper contango widening again, and physical premiums which have been quoted as low as $60/t,” the bank added.
Bank also cite a Bloomberg report saying that some copper importers have requested a delay in shipments due to builds in bonded warehouse stocks.
“How quickly end-use demand picks up during the upcoming seasonally stronger period and how quickly this metal can be consumed will determine how long China’s copper imports weaken for and, ultimately, whether the strength in LME prices can be sustained,” Barclays added. China is the world’s largest consumer of copper.
According to the bank, stocks are now at 221,487 metric tons, their highest level since 2002, the bank says. This suggests consumers are keeping buying to an “absolute minimum” due to uncertainty about future demand.
“This is also being reflected in SHFE spreads with the copper contango widening again, and physical premiums which have been quoted as low as $60/t,” the bank added.
Bank also cite a Bloomberg report saying that some copper importers have requested a delay in shipments due to builds in bonded warehouse stocks.
“How quickly end-use demand picks up during the upcoming seasonally stronger period and how quickly this metal can be consumed will determine how long China’s copper imports weaken for and, ultimately, whether the strength in LME prices can be sustained,” Barclays added. China is the world’s largest consumer of copper.
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