Copper stocks on the LME are sliding down faster and the market has failed to realise it. Cancelled warrants slid from 65,000 tonnes to 83,200 tonnes. This means than there is now only 92,000 tonnes available on the LME for new buyers. Obviously someone realises the expected Cu surplus by analysts is not going to happen for a while, its noteworthy that cancelled warrants dropped by 18,250 in just one day.
"copper cancellations jump and spreads tighten In the metals, the copper price rose $38 from Thursday's close to $6,913 per tonne. Stocks fell for the 23rd consecutive day, down a net 1,500 tonnes at 175,850 tonnes. Cancelled warrants, meanwhile, dropped 18,250 tonnes to 83,200 tonnes -
Still, it is spread action that is garnering the most attention, with tightness in cash/threes and June/July at $75/100 and $28 respectively. "
Get ready for the copper bull market, Cu is already at US$3.17/lb, and at the current rate of LME Cu stock depletion you can expect USD$4.00/lb within months. ABY produces about 50,000 tons Cu pa with a market cap of $64 million. ABY also has $135 million in the bank, twice the market cap.
For those you who have followed ABY for a long time might remember me calling the LME Copper stocks and ABY back in March 2009 when ABY was 9.7 cents. Many jumped ship, but those who followed the extraordinary rise to $1.50 and made a fortune. Will history repeat itself?
ABY Price at posting:
20.5¢ Sentiment: Buy Disclosure: Held
