Column: Global exchange copper stocks sink to 15-year lows – by Andy Home (Reuters – June 7, 2023)

LONDON, June 27 (Reuters) – There’s a renewed scramble for copper sitting in London Metal Exchange (LME) warehouses. Headline LME copper stocks have slid from 100,100 tonnes to 77,050 over the last three weeks despite almost 30,000 tonnes of arrivals.

What’s arriving is just as quickly turning around and going out again. Available tonnage stands at just 31,900 tonnes, enough to supply the global market for around 11 hours. Unsurprisingly, the stocks raid has ignited LME time-spreads, the benchmark cash-to-three-months period closing Monday valued at a backwardation of $31 per tonne. It’s the highest premium for cash since November last year.

The drain on LME copper stocks is puzzling given weakening manufacturing activity in both Europe and the United States. The closure of Swedish producer Boliden’s (BOL.ST) Ronnskar smelter has opened up a 220,000-tonne supply gap in the European market, but the swoop on LME stocks started before the June 13 fire at the plant and has been focused on Asian and U.S. locations not European.

It wouldn’t be the first time that the LME stocks signal has been refracted, and the lower the stocks, the easier it is to bend the light.

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