Skip to comments.Chaos Strikes In Copper-Town
Posted on 10/18/2021 3:15:36 PM PDT by blam
The chaotic moves in various energy markets around the world have spread to the metals markets with copper inventories available on the LME plunging to the lowest on record (since 1974), in a dramatic escalation of a squeeze on global supplies that sent spreads spiking and helped drive prices back above $10,000 a ton.
Copper tracked by LME warehouses that’s not already earmarked for withdrawal has plunged 89% this month after a surge in orders for metal from warehouses in Europe.
As Bloomberg reports, the last time that type of dynamic developed was during a historic squeeze in 2006, when a buying spree early on in China’s industrial boom drained LME on-warrant inventories to a near-record low. LME inventories are now at even lower levels than was the case then, while Chinese inventories also dropped Friday.
“If more metal doesn’t make it into the exchange, then it really is in a difficult position,” Michael Widmer, head of metals research at Bank of America, said by phone.
“Right now the LME is running a physical contract that effectively is not really backed by physical metal.”
And that ‘difficult position’ just showed up in a huge way in the copper spread as spot/cash contracts on the LME traded at more than a $1,000 premium to those maturing in three months, the widest spread since at least 1994, surging higher in recent days as freely available stock on the London bourse dwindled…
“The LME notes recent price activity in the copper market. We will continue to closely monitor the situation, and have further options available to ensure continued market orderliness if these are required,” the exchange said in an emailed statement to Bloomberg.
Is another oil-esque delivery debacle here?
I normally don’t use copper much but Kline like it around incase company comes by. Mine runs around 1000 to 3500 feet per second. Always keep some close. IMO
We have tons of Copper in Northern Wisconsin and the UP - the EPA will not allow copper mining.
Wait until factories and warehouses need new electric motors - The motor prices will be double +
Thanks Clueless Joe!
Scratch the Kline in that post. Spell check strikes again. “Let’s go Brandon”
So they are selling something that doesn't exist? That was called fraud when I was young.
Might be a good opportunity for the Gamestop crowd over on Reddit.
Was thinking along the same lines. Somebody is going to demand physical delivery of the underlying commodity.
Too bad Bunker Hunt isn’t around any more.
Spike for demand is bullets. Is Lead following it?
D’Anconia Copper +1000%
We make semi-annual trips to the ‘Scrap Yard’ now known as a ‘Recycling Center’ and the last time we went, we had a lot of copper for some reason and THAT was the biggest payoff of them all.
I think our total of ‘cashed in junk’ was $250 and $64 of that was copper. The rest was iron and aluminum. (I remember Beau commenting on how much he got for the copper.)
I bought a very HEAVY spool of copper wire from a guy at a Garage Sale years ago. I was just going to use it for crafting; had no idea it was worth a mint until later. I got it for $10 and it was HEAVY. ‘Hard for me to lift’ heavy!
Anyhow, I used it as part of my ‘bargaining chips’ when Beau asked me to marry him. That spool, along with all of my ammo, sealed the deal, LOL! ;)
I mean, if you’re going to fall in love anyway, you may as well fall for someone that will be a good Zombie Apocalypse Team Member, ya know?
“We have tons of Copper in Northern Wisconsin and the UP - the EPA will not allow copper mining.”
We do! I think that was one battle that Governor Scott Walker (R, WI) lost.
He didn’t lose many, and he took a LOT of punches for Wisconsin from the Socialist Democrats, but that one he lost. :(
it’s bout that time...
And I need a 250’ spool of 14/2 w ground Romex...
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