World Copper Stock Hits Year-High

World copper ingot inventory hit year-high at 625,493 tonnes at warehouses registered London Metal Exchange, New York Commodity Exchange and Shanghai Future Exchange on Monday. The stock was higher than former high at 622,842 tonnes on February 25. The stock keeps increasing since summer when the supply gets easier after tight supply in the first half year.

LME’s copper stock was 438,525 tonnes on Monday, which was 3,450 tonnes higher than Friday level. The stock level is 70% higher than the bottom in mid-July and the highest level since late April. The stock especially increased in Pusan, South Korea and Singapore due to liquidate of Chinese overstock.

Chinese copper ingot import was more than 2.5 million tonnes in January-September, which was much higher than annual import of 1.46 million tonnes in 2008. China imported the ingot when copper scrap generation decreased under slow economy worldwide. Chinese traders’ arbitrage trade also contributed to the higher import when LME price was lower than SHFE price. Chinese higher import reduced the LME stock from April to July and Asian stock was almost zero especially at Pusan and Singapore.

Chinese players recently try to liquidate overstock after aggressive import earlier the year. The liquidation contributed to higher LME stock while copper ingot demand is lower than before when copper scrap generation increases under recovering economy. Some traders try to make money through arbitrage when LME price is higher than SHFE price.

SHFE copper stock keeps more than 100,000 tonnes since November, which is around 6 times of the level in the beginning of the year. Chinese dealers apparently hold 600,000-700,000 tonnes of overstock. COMEX copper stock was 85,691 tonnes on Monday, which was 2,570 tonnes higher than Friday level and the highest level since July 2004.