So what we are seeing is a four way squeeze on copper – lower global demand, an interruption in China’s power demand, the absorbing of China stockpiles while the price is high and selling by the hedge funds who are being mauled by this process.

My view is that by using their stockpiles at a time of lower demand, the Chinese appear to be using a fortuitous set of events to put the squeeze on the hedge funds. Last night copper fell again in a trading pattern that indicated hedge fund selling. What Xiao is telling us is that the second half of the year China will be back in the market, by which time they will be hoping that the current squeeze will have lead to lower prices.

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