fundamentals, page-90

Summary: LME warehouse stocks continue to drop, China reputed to be building a 300,000 tonne stockpile of copper. Hence, supporting prices for years to come.

http://www.kitco.com/news/2013-12-23/KitcoNewsMarketNuggets-December-23.html

"Copper prices are largely “stagnant” amid offsetting factors, says optionsXpress. The market has consolidated in the last half of 2013 after a sell-off early in the year. “The copper market appears trapped between conflicting fundamentals, with bulls touting the steady drawdown of copper stocks in LME (London Metal Exchange) warehouses, which are currently over 40% lower than the highs seen back in June,” optionsXpress says. “In addition, China’s State Reserve Bureau is planning on building state-owned reserves of industrial metals in 2014, including potentially 300,000 tons of copper and nearly 150,000 tons of nickel. The SRB has a goal of accumulating 2 million tons of copper by 2015, and may be an aggressive buyer on price dips. In the bearish camp, we note copper prices are well above historic price levels, although the huge appetite for commodities out of China may be contributing to a ‘new normal’ price range for the red metal for years to come. The news last week that the Federal Reserve would begin to taper back its bond purchases by $10 billion per month has triggered a strengthening of the U.S. dollar, which is generally viewed as bearish for commodities priced in dollars, as it makes purchases more expensive for non-dollar users.” Heading into 2014, copper’s direction may depend on whether the global economy continues to gain traction, which would help to support commodities such as copper, optionsXpress says."