There seems to be large inventories in China being used as...

There seems to be large inventories in China being used as collateral on other trades so uncertain how available that is. Half the LME stock is apparently located in the US, away from main center of demand and with long queues to wait in if you want to access the physical metal. Sounds like Glencore has been trying to pull the same stunt in Europe.

http://agmetalminer.com/2012/04/19/glencore-has-copper-in-a-squeeze/

I guess every market has its banksters, and its muppets. Glencore is also a major copper producer as well as trader, (especially if you include Xstrata), so no prizes for guessing which side of the trade they prefer.

Copper has traded at a steep premium to its marginal production cost for many years, and price rarely moves in line with inventories. Its been going on so long the market assumes its indefinite and these days regards a price of $3.50-ish as a complete bargain, though you could probably produce as much if it were half the price. It similar to oil in this regard, though there's a lot more had wringing about oil as its effect on the US consumer is more direct and obvious.

In this instance the "muppets" aren't exactly powerless, will be interesting to see if they have a response.