Win us with honest trifles

Chart of the day is…

…the five year LME warehouse copper stocks chart:
Because it goes with this Andy Home report filed yesterday, “The hidden hand in the global copper market”.  Here’s an extract, but do make a point of reading all this one:
In the short term, it represents a red flag for those expecting further Chinese economic weakness to translate into lower copper prices.
It’s clear that any further price declines, say toward $6,000 per ton, are going to incentivize the bureau to buy still more metal.
Which is not to say the price can’t go lower, just that if it does, existing tensions in LME stocks and spreads are likely to accentuate.
In the next two years, might the SRB simply suck in all this market’s expected surplus?
Ever since the bureau first showed signs of activity late last year, there has been consistent talk in the Chinese market that it is working toward an end-2015 target of having around 2 million tonnes of copper.
Of course, we don’t know what the starting-point was, but it now seems fair to assume that it will buy something like a million tonnes over the course of 2014 and 2015.
That would account for most analysts’ expected cumulative surplus over those two years.

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