IKN

LME Week is here again (my how time flies) and here, from some RBS flunkey, is the best quote from the copper suits I’ve seen so far in their week of spotlight (in bold).

“The world economy is by no means out of the woods, but in our view the theme during LME Week will be the prospect of demand recovery in 2010,” Royal Bank of Scotland said in a note.

“Yet we would still urge producers to be very cautious about embarking on price induced as opposed to demand induced reactivation.“

This can be put into real English thusly: “There’s an awful lot of idle supply waiting to jump back in, but if it does copper will sink so don’t screw the roost and start ramping back up, pleeeeeeease…. cos I want my bonus“.

Demand, eh? Supply, he said? My, the oldskool words are back in fashion! So how is that demand coming along (inquiring minds etc)? According to some flowery named dude over at Nexans:

“If you look at the physical market I see pretty depressed prices over the coming months. Prices are likely to fall this year and part of next year. It really depends on when growth will pick up.”

The same note then goes on to point out an inconvenient truth or two, such as:

At the end of May, 21% of all copper in LME warehouses was booked for delivery. Today, the proportion is 2.6%.

With LME copper inventories now at 347,375MT and climbing, it really doesn’t look very good from the underlying demand.

As the JP Morgan flunkey puts it (quoted in the FT):

Michael Jansen, of JPMorgan, said that he expected increases in metals stocks would be a “significant hurdle” to further price gains.

DYODD, dude.