NEW YORK Copper
stocks in London Metal Exchange-approved warehouses in New
Orleans have risen by more than 25,000 tonnes in the past month
amid low physical demand and oversupply.
As of July 16,
registered warehouses in New Orleans held 200,300 tonnes of
copper cathode compared with 174,800 tonnes on June 17,
according to the most recent LME data available.
The increase in
volumes comes despite daily deliveries out of each of the
citys warehouses of 500 tonnes of copper per day, as
required by the LMEs minimum load-out rules (
amm.com, Nov. 15, 2012).
But the large volume
of zinc stored in New Orleans662,225 tonnes as of July
16means that the copper being delivered into the same
warehouses could get caught up in the lengthy queues to get
material out, contributing to the stock build, market
"Its just been a
slow build of unavailable copper stocks," one metals analyst
told AMM. The analyst blamed the long zinc queue at
New Orleans warehouses and oversupply of copper for the
increase in inventories.
producers have met or slightly exceeded (production)
expectations," he said.
Copper traders and
consumers had expected supply to tightenand
therefore prices and premiums to move higherafter the
wall slide at Kennecott Utah Coppers Bingham Canyon Mine
in April (
amm.com, April 11) but the effects were muted
after Kennecott met its contractual obligations in June (
amm.com, June 12).
"Theres not much
happening at the moment," one copper trader said of the market.
With Chinas economy down and Europe at a standstill,
theres not as big a market for copper as previously
expected, he added.
New Orleans in-warehouse copper premiums have traded in a range
of $70 to $120 per tonne since late June.
warehouses in the United Stateswhich include locations
such as Baltimore, Chicago, Mobile, Ala., and St. Louis as well
as New Orleansheld a total of 217,700 tonnes of copper as
of July 16 compared to 198,050 tonnes of copper on June 17,
according to LME data. Global copper stocks stood at 632,150
tonnes on June 17, up 9,075 tonnes from 641,225 tonnes on July