LME Copper Stock Hits 6-Month High

World copper ingot inventory registered to London Metal Exchange reached 400,000 tonnes for the first time in 6 months. The inventory increases mainly in Asian warehouses when Chinese players apparently sell overstock. World copper supply is getting oversupply when copper inventory increases in total figures including LME, New York Commodity Exchange and Shanghai Futures Exchange.

LME copper stock increased by 4,800 tonnes to 402,125 tonnes on Thursday from Wednesday, which represented 57% higher than recent bottom in mid-July. The inventory at Busan reached 63,300 tonnes from almost zero during the period while Singapore’s inventory increased to 5.5 times at 16,400 tonnes.

The higher inventory is apparently due to higher supply from overstocked Chinese market. Chinese copper import increased by around 80% to 2.58 million tonnes in January-September from full year 2008 due to arbitrage and national stockpiling. However, recently speculators try to make profit when LME copper price is more than US$ 100 per tonne higher than SHFE price. Chinese oversupply also impacts on the overstock, under which SHFE copper stock increased to 7 times at more than 100,000 tonnes since May, despite of the firm demand for infrastructure.

COMEX copper stock reached near 70,000 tonnes, which was the highest level in 5 years and 3 months. The total stock at LME, SHFE and COMEX was 7-month high at 575,754 tonnes.