JP Morgan Denies It Holds More Than 90% Of The Copper Market... No Statement On Whether It Holds 89%

Tyler Durden's picture

As we reported last weekend, in addition to the now indirect admission from JP Morgan (and to all those who are expecting an official 8K from the firm which opens it up to market manipulation litigation, we can only hope they manage to grow out of their childish naivete soon) that it did in fact have a major silver short position, it has been recently speculated that JPM's monopolistic tentacles have reached out to the copper market, of which JPM is now rumored to control 50% to 80%. Today, we get an official non-admission admission from JP Morgan that it does not in fact own over 90% of the silver market. Well, that's not really useful, as that "admission" says nothing about owning up to a whopping 89.9% of the copper market: a stake which would make JPM the biggest one-man cartel in the history of the industrial metal. Per Reuters: "U.S. investment bank
JPMorgan said it does not hold more than 90 percent of copper stock
warrants in London Metal Exchange warehouses, but declined on Tuesday to
comment on whether it had a smaller position.
" It also appears that per the LME the position is now no longer "only" 50-80 but has grown to 90%: "
A single holder, recently controlling 50-80
percent of copper stocks and cash contracts in London Metal Exchange
warehouses, appears to have raised the position to above 90 percent,
latest data from the world's biggest metals market showed." And for those who wonder why one entity controlling the entire market is not good here is the explanation: "
some say it is one of the reasons why copper hit a record high of $9,267.50 a tone on Tuesday." Oddly enough, JP Morgan did comment on the firm's holdings in copper, which it so far has refused to do vis-a-vis its silver position: "A spokesman for JPMorgan, asked by Reuters to
comment on the market talk, said the company did not hold more than 90
percent but declined to comment further.
" And this is the environment in which the CFTC still obstinately refuses to impose position limits lest it derail the massive profit scheme that one-time or recurring monopoly holdings represent for the big banks.

Some more from Reuters:

At present one company holds dominant positions of between 50-80 percent in both nickel and zinc cash contracts and stock warrants.

The LME has the power to step in and force such long position holders or "longs" to make metal available to other market players by imposing its lending guidelines, which are aimed at ensuring orderly markets.

Under these guidelines, if an LME member or client holds 50 percent or more of the warrants or cash today/cash positions, it should be prepared to lend at a premium that is no more than half a percent of the cash price for a day.

A spokesman for the LME futures market, which is one of the few remaining open outcry exchanges, declined to comment on the copper position.

"I suspect it could all turn out to be a bit of a storm in a tea-cup," said Gayle Berry, analyst at Barclays Capital.

And while the LME sees no problems with cartel-like behavior, throw in some synthetic products like ETFs and ETPs and you will soon get total confusion:

Falling ore grades, disruptions and project delays also mean that copper supply will, possibly starting this year, fall short of demand estimated at about 19 million tones this year.

Highlighting such tightness, since February, LME copper stockpiles have dropped by more than one third to 350,900 tones, from six-and-a-half year highs of 555,075 tones in February.

"If you have inventories that continue to be drawn down, then you're going to have a concentration as a function of that," Berry at Barclays said of the copper dominant position.

"Then throw into the mix the potential for warrant buying for the exchange traded funds, that's what is all adding to this," she added.

Last week, ETF Securities' physically backed copper, tin and nickel exchange-traded products (ETPs) made a tentative debut in London, as investors sought to gauge sentiment ahead of potentially larger offerings.

Deutsche Bank said in October ETPs backed by copper could hold 300,000 to 400,000 tones of metal.

Concerns that ETPs will exacerbate tight supplies of copper helped propel prices higher.

The biggest loser in all of this is of course China, will continues to be the biggest single end user of the metal, and instead of speculating, is forced to actualy cash out on purchases (most of which are on record credit numbers). Which means that even more inflation is about to be exported to the world's most populous country, which in turn means that the interval until the biggest inflation/credit bubble pop is getting ever shorter.

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the mad hatter's picture

white collar criminals print more money than you can count.


Bearster's picture

Yup.  It is "criminal" to buy copper.  Oh, wait, no it isn't.  It is criminal to buy a "lot" of copper.  People need to be forced to do what we want them to do, in order to keep them free.  Or not keep them free, but keep the market free.

Somehow forcing JPM to buy one kind of future (silver) and sell another (copper)  keeps markets free.  Somehow.

the mad hatter's picture

it's criminal for the fed to back these fuckers with infinite purchasing power so they can do whatever they want in markets. then if they go belly up, the fed bails them out.

oh wait that's what happened in the housing boom.

Obaminator's picture

JPM and all the rest of the fuker banks cried kicked and screamed in 2007 & 2008. They were "On the brink"...then 2009-2010 they report the 2 best years ever in bank revenues.


Why? How? - Well, lets just put it this way...: they are taking back every fukn dime they lost from Helocs and UNderwater houses, but they are doing it from the entire world right now. Will it be enough to cover the Losses once they report them? Maybe...I have a hunch JPM will survive and BofA or Wells will die.

the mad hatter's picture

the central banks won't let that happen.

revenue_anticipation_believer's picture

"central banks won't let that happen" it's not Lehman 2008 nor the Royal Bank of Scotland...the new theme is system stability, or the illusion....and the many mini-flash crashes have been a continuing TEST of NET negative (bounce-back) feedback in the loop...resiliance...

DOING GODS WORK, more than just Goldman, JPM is preventing copper from crashing in price, asset prices must be held up that is the agenda for now...Chile, what with its earthquake as supplier of copper MUST sell at whatever low price the market 'discover' excepting that DEMAND/HOARDING by JPM is preventing THAT...good...

SO, PER ZH things i did not know: ""Last week, ETF Securities' physically backed copper, tin and nickel exchange-traded products (ETPs) made a tentative debut in London, as investors sought to gauge sentiment ahead of potentially larger offerings.""

""Deutsche Bank said in October ETPs backed by copper could hold 300,000 to 400,000 tones of metal.""

""Concerns that ETPs will exacerbate tight supplies of copper helped propel prices higher""

""And while the LME sees no problems with cartel-like behavior, throw in some synthetic products like ETFs and ETPs and you will soon get total confusion""

Seems to me, what with ALL THE NEW MONEY = debt old/newly created, that INDEED, asset prices SHOULD be pushed up, so as to encourage industrious digging for new copper, nickel, and zinc (reminds me of the OLD RioTinto Zinc company)

...all part of the PIMCO "new normal" get used to it, don 't fight it, some 'crumbs off the table' is being allowed, for the Retail/DayTraders, etc..Equities prices are being permanently pushed higher, with a Bernacke/central bank 'PUT' don't fight the Fed, and now the Worlds Entire Banking Cartel...don't resist, go with the flow, BUT PUT 99% of your speculative efforts into being ready to U-TURN on a dime... within a few minutes/few hours at most..

Doing Gods work, yes..when ONE BANK in the USA can match and beat China in the copper trade/stockpiling....well, VERY VERY interesting...

Sudden Debt's picture


LongSoupLine's picture

I REALLY hate those fucs, and will scream with school-girl like joy the day they are fully exposed and hung out to dry.


In the mean time, I continue to buy physical to do my small part toward their destruction.

goldfish1's picture

I vowed many years ago to hang the American flag again once Cheney meets his maker.


Fully exposed may never come to be but for those who can read between the lines, exposed and ruined may have to be good enough.

flacon's picture

The CFTC really needs to stop condoning criminal behaviour. 

johny2's picture

This is so wrong. How can they still keep this going on? 

assumptionblindness's picture

What's so wrong?  Is it wrong for JPM to make some money as they lob derivative mortar shells on behalf of Uncle Sam over the Pacific?  JPM is only one of many soldiers that have been enlisted to fight in our yet 'undeclared' currency/trade/Zhu Zhu Pet manufacturing war with China.  The outcome of this war for us, however, more likely resembles what happened to France at the Maginot Line than our recent experiences with extended-stay stalemate'victories' in Korea, Vietnam, Iraq, and Afghanistan... 

The Fed has pissed away the reserve currency status for the dollar.  New York has lost it's title as "The Financial Capital of The World."  Lack of effective regulation at the Fed/CFTC/SEC/FINRA(hee hee) has destroyed all confidence that global investors may have had in price discovery and market efficiency within our borders.  The costs of social programs and over-priced benefits have driven productive capacity overseas...oh yeah!  How could something so wrong be so right?

Lord Koos's picture

"The costs of social programs and over-priced benefits have driven productive capacity overseas..."

Greed is what sent jobs overseas.  Germany seems to be doing OK.


tmosley's picture

Then you'd better use greed to bring it back. Threatening to treat capital like shit certainly isn't going to do it.

Mr Lennon Hendrix's picture

Blackhawk Ben S. Bernanke doesn't "print" monie.

Gully Foyle's picture

He became a man the day of the greatest game he ever played. Everything he ever knew about common decency and morality he learned that day in December from Alan "The Horse" Ameche; and today in the Superbowl he would earn his wings. The crowd had assembled; a crowd of America's elite. Toyata salesmen from all around the country -- orientals and even those suspected of being orientals -- stacked on the thirty yard line watching him sweat and wipe caked blood from his face. The Gallow brothers -- Ernest and Julio -- party guys who had skinned a few Mexicans and forced them to carry them on their shoulders down to the pre-game tailgate parties at the colosseum. The Pepsi and Coka Cola bottlers of America -- Coke adds life; It's the real thing -- bombarded by missiles; flying flaming matchbook covers. The waterheads from General Motors up in the top seats where they belong; getting the worst of the pollution. All sorts of weird mother****ers were at the game.

merehuman's picture

as an outsider and dumshit i see a different view.

I see china bearing down on rare earth minerals, now i see JPMorgan on the frontline of the war with china. Making copper more expensive for china is a retalliation from our side.

I dont see this ending well. Meanwhile china is trading its remaining dollars for all the hard goods it can get. Including silver and gold. As i see it we are at war with china and these are the beginning blows.

My point of view sucks.


rlouis's picture

Interesting thought that this is retaliation for the Chinese rare earth metals play.  I was wondering what the Chinese are demanding from JPM to keep them from taking down the copper market.  I think they're big enough to blow JPM out of market. 

revenue_anticipation_believer's picture

"" copper market.  I think they're big enough to blow JPM out of market""

China? ARE they "big enough?" maybe WE have overestimated or been propagandized to think of China in the manner of thinking about Japan in the 1980s  - when some Japanese bought the Monterey california Pebble beach concession for 2 billion... and forced to liquidate at less than 1 billion just a few years later....

After all, China does have Internet and all those 95% OTHERs in China, making STILL low low wages....WANT some of the Wealth OR ELSE...quite a economic burden for China to "bootstrap" itself up with 95% ball and chain expecting 'communal, communistic, sharing'

Yes, perhaps JPM is 'instancing' the real Political/Economic power situation..



A Texan's picture

The ironic thing is that we have PLENTY of rare earths - with the only problem being the pollution connected with extraction (they are mainly located with thorium, which is radioactive).  If we really wanted to, we could have plenty of rare earths and sink their price so as to remove that card from the Chinese hand.  All that's needed is the willpower to pass a law exempting this from most environmental regs (though we still want some control over it, hence "most").


A side benefit would be that we could (again, if we wanted to) build a bunch of thorium-powered reactors and screw the Arabs and Chavez in the process.  Oh, and we'd employ a bunch of people right here in this country to mine and process both the metal and the thorium, plus folks to build and operate the new nuke plants.  Everyone's a winner (except for folks that don't like this country too much, including enviro-whackos).

revenue_anticipation_believer's picture

""The ironic thing is that we have PLENTY of rare earths - with the only problem being the pollution connected with extraction (they are mainly located with thorium""

and of course, THORIUM based nuclear power reactors, the old 'prolifereation arguement is null and void'  (well yes there is cooked-up a little artificial U233 !! in the process...

I'd think THAT is essentially factual, we HAVE the metal minerals, but will not produce them...'environmental concerns' and 'too low a World Market sustainable price..   exemplication is the famous Stillwell Platinum Mining operation - DID EVERYTHING ENVIRONMENTALLY CORRECT, yet STILL FUCKED..mostly....

a LITTLE bit of the old WARTIME emergency banter is required, to restart the Strategic Metals Stockpiling sustain the USA/Canadian mining companies with a permanent, known buyer/market...

(dr Strangelove)  'what we have a mining gap, USA and China/Russia, must catchup, become strategically independent of potential 'enemy country suppliers'   a little of the 1950's and 1960's thinking, pretend War Mongering...could be useful...more of Gods Work in Progress..

DoChenRollingBearing's picture

@ merehuman, I find that your point of view rarely sucks.

Take advantage of the war with China!  Front run them!  Buy PMs and get all the nickels you can from the banks (each nickel is worth $0.065 now)!

What_Me_Worry's picture

"A spokesman for JPMorgan, asked by Reuters to comment on the market talk, said the company did not hold more than 90 percent but declined to comment further."

Maybe they meant literally? 

Trifecta Man's picture

Wouldn't it be neat if JPM did not read the fine print and somehow holds paper copper?

detersbb's picture

At this point the only reason for taxpayers to fund regulatory agencies is to protect bankster monopolies at no expense to the bank's bottom line.  This really is a perfect circle jerk.

tradewithdave's picture

I did NOT have 90% financial relations with that copper market.


SpeakerFTD's picture

This doesn't have to be owned by JPM itself, correct?

Couldn't it be a JPM client account that they are holding in their name?

If so, I would bet it is Chinese, and they are very offsides.   The Hung brothers, if you will.

rosiescenario's picture

Good point...also, I would not be too worried about a copper shortage...IMHO I'd be more worried about a glut with a corresponding crash in its price....think about where the big demand is for you'd have to believe the construction industry worldwide is running in high gear....

trav7777's picture

banks have no business in futures markets.  Only producers and consumers should have seats.

Bearster's picture

Ahah.  Now I understand the principle.

In order to force markets to be free, only people we say, are allowed to trade.

You obviously feel that speculators serve no valid purpose.  And obviously you feel market makers serve no valid purpose.  History is full of economic illiterates whose feelings told them who did and did not serve a valid purpose.

I am fine with that, until the fools pick up a gun (or lobby the government) to coercively implement their fool whims by force on everyone else who does understand what purpose market makers and speculators serve.

Obaminator's picture

Banks, who's primary Mandate, under Federal Law, are to take deposits and make loans based on Sound Accounting Practices with those Deposits Such that those deposits are SAFE.


Banks buying Stocks, Commodoties and High-Risk "Investments" Break Every Fukn Last rule, and Law concerning banking, and then they get Bailouts when those risky positions Blow up.


Thats what the fukn problem is...not speculators...its Who is Speculating with WHOM's money - jackass.

merehuman's picture

hit that nail on the head! Oh and dont forget the jobs outsourced. Thats our national big pain also

Mr Lennon Hendrix's picture

Fuck corporations.  Fuck the interest of usury.

DoChenRollingBearing's picture

@ Mr Lennon! 

Corporations are useful for many things like selling bearings in Peru:

(in Spanish, and we are still working on it, still a little rough.)


And I would not loan money to anyone(except to a family member, etc.) unless I got some interest to balance the risk I would take.

So who would then get credit?  World trade grinds to a halt.

tmosley's picture

Speculators play a role as well (insuring against supply gaps, namely), but individual positions should be limited by the exchanges to ensure their own stability.

Banks should be able to speculate all they want (subject to the limits placed upon them by their shareholders and the exchanges they operate on).  The problem we have is the link to the central bank and the infinibux they supply them with.  If their asses were really on the line, they wouldn't dare pull any of this garbage, and if they did, they would be gone the instant anything goes wrong and we wouldn't have to hear from them any more.

The exchanges can set the rules as they like, of course.  The point is that speculation does provide a valuable service to the market, and that anyone playing with their own money should be able to do what they like.

Larry Darrell's picture

anyone playing with their own money should be able to do what they like.


I just wanted to highlight this point again for the "Bearster"

I figured he missed the point the first 2 times (first from Obaminator then from you).

After all, if he's not a total shill that means he's just fucking stupid, and with stupid people, you have to repeat a lot, slow it down, and spell out the important parts.


Did you catch that yet Bearster you fucking moron???

nathan1234's picture

Those bums built these for different types of casinos.

imaginalis's picture

Why doesn't China go on a quick silver binge to hedge against JPM's copper hoarding.

Lord Koos's picture

I think maybe they are, JPMs hedge against shorts on silver was long on copper?

Lotionboy's picture

These crooks are going to be toast when the dollar crashes next year!!! I love it.

jus_lite_reading's picture

CNBS should be reporting that increased yields in T's means a healthy sustained recovery is expected next year!!!


Except that, they forget to mention, they're really expecting stagflationary hyperinflation...


Hey TD: How much has the Fed now lost in T's? $31 BILLION? Wipes out their "gains" from the TARP! LMAO!

Obaminator's picture

What happens when you own everything, and then something happens that makes nothing valuable? HAHAHAHAHA

jus_lite_reading's picture

That's when you hope you've got a gun. A BIG GUN!

SWRichmond's picture

...or a lot of friends with medium-sized ones that they can actually hit something with.

erik's picture

so they are trying to sterilize any losses going forward in silver shorts by gains in copper longs?

won't other big money smell blood in the water and go heavy short copper and long silver?

when China finally raises rates, copper could plummet, but silver may not drop as much, thus more losses for JPM.

erik's picture

doesn't that make going long silver and short copper a really good opportunity?