Copper Analysis 2014-03-26

Watching other commodities, it seems that one method of getting people to sell out their stock is to raise prices to ridiculously high levels. The get-rich-quick boys sell out near the top. Then prices are pushed lower and lower. And lower. And lower. Finally, the stay-poor-forever boys get tired of the bleeding and sell out near the bottom. After that point, prices get back to a reasonable equilibrium.

Gold prices are lowered by massive selling to disrupt supply and demand. Admittedly, copper is NOT gold, but it is a real commodity asset in the paper world of derivatives and futures built on margin.

Take a look at the 5-year LME copper stocks chart. Does this imply an oversupply, or manipulation?


Kitco - Spot Copper Historical Charts and Graphs - Copper charts - Industrial metals

China is a wild card, but I'd suspect that bankers and speculators probably affect the price of commodities more than actual demand for assets right now.

Speculators don't affect long term pricing trends, just small blips in one direction or another for a few months as they buy futures or short them. Traders are looking to see if Russia invades Ukraine which will cause major sanctions and loss of trade (less copper needed).

I don't know if this is true or not but heard on the Fox Business chanel that China was getting ready to start another building boom. When will this staert? I don't know. I do know that China has a stock pile of copper,steel, aluminum and what ever but sooner or later they'll have to replenish their stock and hopfully the prices will go up.

china has whole cities built with nobody living in them, can't see them doing another building boom anytime soon.