Here’s the 60 day copper chart that includes this morning’s action in London that sees it at U$1.61/lb. As we can see, this strong upmove is not the first this year but it does come (yet again) off the U$1.45/lb level that’s become the baseline in 2009 so far.
Let’s just point out in passing that copper is a good barometer for China growth. They need 4.5 times more copper imported than they produce themselves, biggest import/export ratio of any base metal shipped to China by quite some distance. So with that in mind, let’s check the longer price chart again:
The above chart is the main reason why iIm not getting hot under the collar about copper yet. U$1.60/lb is a help for the producers for sure (go CS.to!), but there will be no repeat NO new project funding for the greenfields while the spot price begins with a “1”.
Another thing that has perked up spot prices is the slight drawdown in warehoused copper. We can see the LME figures in this chart……
…and that’s another small positive in the mix. The general market thinking is that China is stockpiling at these low levels. That may well be true, but let’s again check the longer chart and get some context on the post Chinese New Year drawdown.