Copper inventory levels on the London Metal Exchange fell below 300,000 metric tons last week, the first time since December 2012, and canceled warrants remain close to highs of 60%, but this stock tightness does not seem to be reflected in prices, said Citi Bank.
According to Citi, LME three-month prices are trading at around $7,200 a metric ton, versus mid-December 2012 prices of over $8,050.
“Given that today’s macro environment is slightly more positive than late 2012, with clear signs of developed world recovery, although China hard landing concerns still persist, we believe current LME price levels reflect growing mine supply, expected refined production growth, and more importantly global inventory. Indeed, the LME price level is not reflecting the LME stock position, but appears to be making implicit assumptions about copper inventory elsewhere,” said David Wilson, analyst at Citi, via Kitco News.
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