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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Louis V. Lambrecht who wrote (32399)	11/17/2004 10:03:03 PM
From: russwinter	Read Replies (2) \| Respond to of 39344

Bureau to play key role in copper supply, say analysts November 15, 2004 China's Strategic Reserve Bureau (SRB) is likely to play a pivotal role in easing or deepening supply tightness in the copper market at home and abroad, analysts said. With copper prices hovering just below 16-year peaks on dwindling exchange stocks, the market has been focusing on tightness in China and unreported stocks rather than the impact of higher oil prices on global growth. SRB was believed to have a long position of 36,115 tonnes of copper for December delivery in the Shanghai Futures Exchange where warehouse stocks totalled only 24,233 tonnes. The bureau could be in a position to ease tightness in the market in the short term by lending its long positions in copper to the market rather than take delivery, an analyst said. ``If they [SRB] take metal out of the system in the short term, it could hasten the crisis, but we are rapidly reaching the pinch point anyway. There is simply not enough metal in the pipeline,'' Bache Financial minerals strategist Angus MacMillan said. On Friday, LME three-month copper jumped as high as US$3,028.50 (HK$23,622.30) a tonne, the highest since October 13, on fund buying after sharp gains in Shanghai due to tight supply there. This compared with Thursday's close of US$2,988. The market hit a 16-year peak of US$3,175 in mid-October before falling below US$2,700 on fears of a slowdown in Chinese growth and concerns over soaring oil prices. However, some traders questioned if there was a real physical squeeze in the market. ``The recent tightness in Shanghai reflects two things. The SRB is one, but I think the bigger [influence] is technical,'' a trader said. ``There is so much speculation on Shanghai. The money has poured in from people with no clue about the metals market, but were attracted by stories of how much money could be made on the Shanghai futures market,'' the trader said. On Thursday, Barclays Capital analyst Ingrid Sternby said there were considerable hidden stocks of copper in Singapore. ``There are reports that large off-warrant stocks exist in Singapore, allegedly 150,000 to 180,000 tonnes, which are to be imported directly by domestic customers and traders,'' she said. However, a London-based physical trader said off-warrant stocks in Singapore were lower. ``I would think there are about 50,000 tonnes in Singapore,'' he said. On Friday LME warehouse stocks were 68,525 tonnes, of which 57,000 tonnes were on-warrant and available to the market. REUTERS