June 2012 | Base Metals
A double-bottom could be forming: Copper - Market Analysis
Prices fell again and set new lows for the year, but have found support. Technically, a double bottom could be forming, which would be encouraging. The arbitrage window between the LME and SHFE is still closed, but the price differential is narrowing, inventories in China’s exchange and bonded warehouses have been falling, and premiums have been firming. All of this suggests that China may be getting ready to restock.
Dominant position building
What may also be playing a role in tightening the nearby spreads and driving the market back into backwardation, against the current backdrop of rising stocks, is the rebuilding of a dominant position. As of June 22, there was one player holding 30-39% of cash and tom...
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