SHANGHAI, Jul. 6 (SMM) - LME copper inventories increased 40,325 tonnes to 315,925 tonnes on July 5, the peak from late May. Busan and Kaohsiung witnessed the biggest growth, SMM reported.
LME copper inventories had been falling previously as canceled warrants jumped, but actually, the decline in SHFE and LME copper inventories is not driven by consumption, SMM copper analyst said.
The market had anticipated deliveries, and it was just a matter of time. Aggressive deliveries to LME warehouses have been frequent over the past two years, and the resultant influence on copper prices has waned.
Rumor has it recent deliveries were some 60,000 tonnes, which was expected to have been done.
Everbright Futures Director Xu Maili believes the surge in LME copper inventories is due to traders’ deliveries. Copper prices will fall in the near term, but such price declines will not be significant.
SHZQ’s Luoliang said this is the third time of numerous deliveries this year, with the first and second time happening in early March and early May. Based on the destination of deliveries, they must be from one domestic smelter. LME copper prices were weighed with contango expanding. But overall, the impact is not big. Intensive deliveries have been frequent. LME copper inventories are still around 300,000 tonnes. Additional deliveries are expected in the near term except for the unforeseen.
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