Speculators put pressure on copper
by Gill Montia

Speculators are reported to have bought almost all the copper in London Metal Exchange (LME) warehouses, leaving the metal price exposed to strong price rises.
Some traders believe that the party or parties involved are funds, but their identity is being protected by LME confidentiality rules.
Warrants give their holders the right to own up to 129,775 tonnes of copper, and the dominant position is worth approximately $1 billion.
The price of copper has increased by 20% since mid-August and this week reached a two month-high of $8,070.
The metal is predominantly used by the construction industry and its current price is around $800 below the all-time high in May 2006, of $8,800.
According to experts, LME copper stocks are now less than three days’ worth of global consumption.
However, traders are confident that there is plenty of material in the European physical market, where there has been a level of oversupply.
According to John Kemp, economist at Sempra Metals, “Some large dominant positions have emerged” but “it is purely an investment phenomenon rather than genuine demand.”
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