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 participants said.
"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.
"This summer, 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.
AMMs New Orleans in-warehouse copper premiums have traded in a range of $70 to $120 per tonne since late June.
LME-registered 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 16.