COMMENT: 'Certain parties' and the future of the LME

May 04, 2012 | 06:49 AM |

You produce and trade copper in China, the country that is the world's largest producer and consumer of the red metal. Copper prices in the global market turn, to a large degree, on investors' anticipation of demand in the market that you are most plugged into. Yet physical demand is poor and your domestic market is trading in a contango, while the global market is trading in a backwardation, suggesting a nearby tightness of metal. And it is not easy if you want to deliver into that backwardation, since the LME's nearest warehouses are in South Korea. A large portion of your domestic contract sales are transacted....

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