Copper-Inflow Chatter Masks Looming Deficit, Top Miner Says – by Laura Millan Lombrana (Bloomberg News – July 11, 2017)

A surge in copper stockpiles isn’t sounding any alarm bells with the world’s biggest producer as supply struggles to match demand.

After tumbling to a four-month low in June, global warehouse inventories have jumped about 15 percent this month, spurring concern that demand for the metal used in wiring and plumbing is waning. Prices have retreated in July.

Codelco Chairman Oscar Landerretche looks at the seesawing of stockpiles and futures contracts as a consequence of increasing financial transactions that can obfuscate longer-term supply and demand factors.

“Short-term reactions can be influenced by a thousand things,” Landerretche said in an interview Monday from his Santiago offices. “Copper prices have cyclical elements, but volatility has increased over time and that has to do with the fact that financial and speculative transactions around copper account now for more than half of transactions.”

While Codelco settles its contracts annually and isn’t as plugged in to the shorter term demand swings as other players in the market, the company hasn’t heard anything from its Chinese buyers that would explain the latest surge in stockpiles, he said.

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