Column: Low global copper stocks jar with market’s downbeat mood

By Andy Home

2022.09.22

London Metal Exchange (LME) warehouses saw 11,200 tonnes of copper arrivals on Tuesday, the largest single-day warranting since June.

Inflows have totaled over 35,000 tonnes so far this month but have been largely offset by departures. Headline stocks of 118,000 tonnes are up by only 3,625 tonnes at the end of August.

LME inventory remains ultra-low by any historical yardstick, representing just two days’ worth of global usage.

But this is not just an LME phenomenon. Registered inventory with both the CME and Shanghai Futures Exchange (ShFE) is also super low and between them, the three exchanges hold just 200,000 tonnes of metal.

The bullish stocks optics don’t sit well with the market’s bearish humor. Currently trading around $7,715 per tonne, LME three-month copper is down by 21% at the start of 2022 as the market frets about slow economic growth in China and potentially no growth in Europe.

The disconnect between visible inventory and price is generating time-spread tightness across all three exchanges and renewed analyst interest in trying to calculate hidden stocks of copper.