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Beijing, We Have A Problem: Warehoused Asian Copper Hits Record High
Pardon this brief tangent from the hypnotic, sclerotic, quixotic, Cypriotic situation which will get no resolution today, or tomorrow, and may at best be resolved on Sunday night following yet another coordinated global bailout, (although our money is on a last, last minute resolution some time on Monday when Cyprus is closed but the European markets are widely open), but as it highlights a key follow up to our article from two days ago, "Dr. Copper's Deja Vu" it is worth being aware of a rather particular problem in Asia right now. A rather well-known problem for those who have tracked the warehousing woes of assorted industrial medals in China as an indication of the true state of the Chinese economy: as of right now, the stocks of copper in Asia (as determined by deliverable LME CLS and Shanghai copper) are at an all time high and up 90% from the previous three year average.
Soon enough every warehouse in Asia will be stocked to the brim. What happens to copper prices then when no more copper can be stored, either for functional or collateral purposes, is unclear, but if the Fed, BIS and ECB somehow manage to manipulate that market next, we expect it will go stratospheric.
h/t Sean Corrigan of Diapason
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Copper fins for bitcoin miners bitchez
What happens? First, the Chinese government takes the warehouses, buries them in concrete and dirt, and resells them to Freeport-McMorON as a mining concession.
Wilbur Ross, Meredith Whitney, Larry Fink, David Pepper, Warren Buffet, Alan Greenspan, Jack Lew have all come out and said that equities are not in a bubble. After all these are such smart people and so rich too.
Maybe they all are right ? What if I miss the rally ? Will I get my dream if do as they say ? Maybe I should just pull the trigger and click the BUY button ?
they mean "not in a bubble" as it relates to how quickly Benny B is printing.. stocks may be trading overly conservatively given the amount of printing yet to be done.
ghost warehouses?
just pre-buying to supply the 2nd and 3rd bathrooms being added on to all those spiffy brand new condos in the ghost cities
btw Larry Motherfucking FINK is long ghost cities and copper
With this much of a copper overhang, what can we say about "Doctor" Copper?
Physician, heal thyself.
> Maybe I should just pull the trigger and click the BUY button ?
Probably far more dangerous than the candy-like History Eraser button - but unless you click it, we'll never know!
give the chinese credit. they're turning electronic 1's and 0's (ben's idea of money) into hard assets. eventually, it will be used. eventually.
I hope they have a few warehouses full of connection grease...
KY?
Someone tell me how to distinguish slowdown/misallocations from war preparation stockpiling. If there is ever a hiccup in the Just-in-Time world trade logistics the Chinese will be sitting pretty. Is this evidence of a long play or of central planning stupidity? Could be either.
Bingo
Copper isn't a bad thing to have warehoused, (although these are extreme levels) but still way better, and more usefull than warehouses full of treasuries...
The Japs (Mitsubishi) have got warehouses full of Tuna.
I hate cancer.
(just want to see if I get junked too)
I'd rather warehouse copper than US dollars any day.
It's got to be central planning stupidity. With so many paper (ass)ets to chase the hoarding of precious metals is so FULL RETARD.
Then lets hope they start a war soon, so the west can get in there and loot the shit clean out of it. yummmm, copper.
Copper is not a monetary metal. Why should we care about its price?
Bad for the world economy, but good for China. I'm sure they'd rather have a metric shit-ton of copper than the equivalent in dollars.
Kurgman: mint a trillion-dollar copper coin!
Copper is not a monetary metal. Why should we care about its price?
If I pay the postage, can you send me all of your pennies? I'll give you the paper equivalent, plus 2 cents per each pre-1981 ones. :D
Copper doesn't only have a 'ton' of commercial and industrial uses, but is great for air mail too. Especially when delivered by Pb carrier pigeons. It makes quite an impression on the recipients, from what I've seen. ;-)
because we want to buy as much ammo as cheaply as possible.
A copper based currency solves a number of problems that exist with gold or silver based currencies, and I've remember reading about China seriously looking into this path...
Just in time for the collapse. Dr. Copper showing the way once again.
Why should we care about it's price? Heh, good one.
It won't collapse until I sell my last share of FXP
Exactly the same thing with CRUDE OIL. Identical repeat of the runup to 2008.
Anybody believing weekly inventory numbers of crude oil storage would be out of mind. That's government data, same as unemployment data, totally manipulated.
Howver Crude Oil impact is a looooooooooooooooooot more felt into the real economy.
In a nutshel this is the equation of the western world economies, particularly USA:
CHEAP OIL = CHEAP FOOD AND CHEAP LIFE.
(Artificially) scarce oil = Misery (right now)
EKM do you just spew standard Troll BS or make it up as you go? Petroleum inventories are DOWN for the year. Price is down YOY, natty gas prices not so much. The Shale Oil and Gas propaganda has brainwashed massive numbers of merkins from reality.....Like viturally all the crap coming out of the Goverment its pure BS. Now that the EIA still comes close to reality my guess is because the Industry would call BS on them if they were not accurate unlike the NAR.
Here is some REALITY for you! Oil and Gas prices
http://markets.ft.com/Research/Markets/Commodities
Check out the TOTALS on the bottom of the page to see the inventory trends you can manipulate the data for more info
http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm
Now look at the Massive Production and Inventory of Natty Gas Uh Uh Uh why the heck is it dropping....Price is to freaking LOW! My guess is next week we could go below the 5 year average! We are already -21% BELOW last year.....But But we are loaded with Shale Gas right . LMAO propaganda. In fact if the Salt Dome inventories had not been added in... like they weren't there before we would already be there... Please tune into the facts and not the BS. SUPPLY is becoming tight at these PRICES.... like it or not!
http://ir.eia.gov/ngs/ngs.html
As far as the Chinese stockpiling Copper...no surprise double bonus. Keep pressure on the Market prices and divesify out of U.S. CONfetti. Chinese are mostly excellent traders. And the A-wipes at the FED are a massive tailwind for them. Once again to the detriment of the PRODUCERS in this country trying to maintain an economy!
Sir, inventories are bulging and I think they've got no more place to put it. Same game was played in 2008.
http://www.brecorder.com/markets/energy/america/78965-the-qmissing-barre...
I have a problem with price drop y/y point of view. You see, it's all about the reference point.
My reference point is 2009, crude oil at $35, hence economy rebounded.
Right now crude oil is $40 at least over priced.
You're showing such an absolute lack of understanding about oil prices that we'd have to start in kindergarten to get you up to speed. Try again later.
That's what people said until 2008.
Everybody bought what you're saying, myself included.
That's why I decided to spend countless of hours trying to discover how it actually works and I did.
Fool me once shame on you. Fool me twice, shame on me.
Copper-backed yaun!!!! "winning". Junk away morons. China is still a single-party state-controlled "market". The U.S. is too, they just don't know it yet. Should ens well... < sarc off >
Few people are coming to ZH to simply junk.
No sense of humor. It shows the misery of the totalitarians out there.
The asians love games, in the spirit of the current world "market" anyone else foresee an exciting game of "picking up pennies from the path of a steam roller" coming soon. Hey, as another commentor points out, at least they will be real pennies.
The Chinese play that steamroller game for keeps:
http://www.theglobaldispatch.com/chinese-protester-crushed-under-steamro...
Think they wouldn't hoard any fuckin thing that could be hoarded? Think a construction worker would stop short of running someone over?
Think again!
Brand new spin on the government buying up ammo.
Can't produce ammo if you got no damn metal!!!
Beijing Dr. Copper...
Washington, We Have A Problem: Weyerhaeused American Paper Hits Record High
I have a sandwich bag full of nickels.
I have a sandwich bag full of nugz.
*cough-cough*
The copper thieves hitting every vacant house around here are about to be disappointed on their future trips to the recycling center.
No problem they can hold it and when the war begins the price will return.
Nah, copper is so last century. DU will be the projectile of choice when the war comes. Need to do something with all that nuclear waste.
Not only that, but landlords are replacing copper plumbing with plastic, after a burglary. And in Chicago and Detroit they take out the furnace and water heater, while it's vacant and boarded up. Of course in safer parts of town or country, they install a burglar alarm as cheap insurance. So, fuck you, copper thieves!
Bullish for pennies.
assorted industrial medals in China
Pretty funny freudian fat-finger there.
What if the U.S. started minting $100 copper pennies? Might be an olive branch to Shanghai to keep the Chinese buying enough USTs for Ben to 'manage the exit.' :D
I think Joe Kernen is hanging around junking every post.
I saw Liesman's fat head trying to duck out of here.
Phew...my dyslexia kicked in and I read "I think Joe Kernen is hanging his junk around every post."
(the taste of bile in my mouth is now receding...)
I think you're correct. I just came across his dandruff ridden toupee underneath the window to Tyler's office along with some half eaten hopium cheese doodles.
LOL...God I love this place.
Think he's got his hand under his chin, muttering through his index finger as he reads this?
I suspect his index finger is most likely up his nose or (hopefully) his ass.
Both, ass first.
The US mint could always outsource penny production to China, win/win.
Pennies are copper plated zinc
even so, they won't be around for much longer
1982-2013 Cent (97.5% zinc) * Face value=$0.01 metal value=$0.0051589 (51.58%)
I suspect that after a few more years of no inflation the US CONgress will authorize just one coin be "minted", a plastic composite dollar "coin" with Benny "The Beard" Bernanke smiling back at us.
<Kill me now. Please.>
Your sense of irony aside, you may be closer than you realize: Something Wicked This Way Comes. The Fed Bitcoin. RFID based. Digital FRNs you carry. Registered, biometric, non-transferable and hence of no value to anyone else but its owner.
Nothing wrong with prepping or farming, but you guys should get out more. Spend more time in Silicon Valley board rooms.
p.s. You heard it here first. So when some parasitic, plagiarizing cocksucker posts a ZH article, it'll be 'old news'.
+1 for the thought. Money, however, is voluntary.
Credit has no value to anyone but its owner already.
The poor will just take the copper to Omni Source.
"we buy pennys"
They just don't build ghost cities like they used to... sigh.
The west learned about chloride additives to concrete with the PVC fiber reinforcement debacle decades and decades ago... If the Chinese are such strategic thinkers and plan so far ahead then either the chinks suck at chemistry or they subscribe to the broken window theory in a way that is going to create an absolute boom for the local demolition industry-
+ 1 for chinks, reds or red chinese.
Seriously, the second tallest building in the world was supposed to reflect positively on Chinese "development" and now they have to stop construction because the bottom 80 floors or so have concrete that unleases slow-acting hydrochloric acid on all the reinforcing steel it comes into contact with... In a couple decades they could effectively demonstrate that a steel reinforced skyscaper is capable of a free-fall collapse into itself (or disprove the theory once and for all), but it does raise questions about the safe lifespan and wisdom of hundreds of billions of dollars in Chinese "investment."
Link to story:
http://www.dezeen.com/2013/03/21/corrosive-concrete-halts-construction-o...
Wow, I'm glad that didn't happen in the Three Gorges Dam.
Coulda been the worst boating accident ever.
Nothing but the price of diesel and some simple geography says they didn't... but since that single construction project single-handedly impacted global steel prices who is to say what corners were cut to pad the pockets of the corrupt, due to lax regulatory oversight? The Chinese could learn from western fortune cookie wisdom- DON'T SHIT WHERE YOU EAT.
All it says to me is it's better to be in hard assets than currency. I myself find it kind of smart in the long run.
Well... Dollars or cooper. They are probably better off in the long run with cooper.
Is consumption of cooper up or down?
D.B. ?
Is that real metallic copper or Chinese Paper Copper?
You guys just don't get the plan. See China is going to build a giant water line from the Himalayas. You turn on your tap in Shanghai, and you get Evian coming out.
LOL
and they will call it n a i v e.
Ok this might be a dumb question but can ya cartelise copper? Like buy it all, store it, and let the supply out bit by bit to keep prices high?
I think you answered yer question with yer second question. Apart from air, I think you can cartelise (word?) anything. There are people walking around the earth that actually think diamonds are rare.
+1 mayhem, so few get diamonds. I have warned a few stackers looking to "diversify tangibles".
It's quite possible that it rains diamonds on Neptune and Uranus.
http://www.spacedaily.com/news/carbon-99d.html
Copper shavings mixed with dirt and river-pickled pigs sprinkled with MSG - It's what's for dinner!
Mmmmmm! Water logged bacon
fyi the last count was 13813
With melamine sauce.
long vultures
LOL - O.K., that first sentence has to be from the original Tyler.
"Copper? We don't need no stinking copper! We melt in some nickel, aluminum, and dental fillings of dissidents!"
A slowdown in China? Not possible! Quick, get Pisani and Cramer on to talk about the next rally!
This is part of China's plan for the copper backed Yuan.
just proves what a joke the usd is
I don't trust those numbers any more than any other Chinese numbers. They have incentives to lie about inventory. I'm not saying there isn't a surplus. I am just saying extra inventory makes a balance sheet look better and good collateral for a loan.
not a problem ...
http://www.nytimes.com/2013/03/21/arts/artsspecial/a-prosperous-china-go...
They are going for the cultural victory too...
Perhaps this is less of an intentional inventory build and more reflective of a demand collapse???
China slowwwwwwwing down.
So is it possible same thing for silver? Eventualy peeps realize "WTF do I do with all this metal?". Next thing you know all at once sell sell sell. Bingo bongo boom 10$ silver!
would think the opposite...if copper and other industrial metals inventories are up and demand down this should curtail mining and most silver production is a by-product of the industrial mining. But so long as the printing goes on, people theoretically should continue looking to silver for protection and silver industrial usage should be static. "Net net silver demand remains strong while supply drops and little to no existing inventory. Should / could be very good.
China could buy all the silver and all the copper in the usa above and below ground at today's price.
No. However, it applies to US Dollars and Treasuries.
Bought silver here. Considering a long silver/short SPY.
20 minutes after the London Silver fix call starts is always a funny time for silver. 8:20 am is when a bunch of banks all announce at what price they will sell you the silver that a client deposited with them on the prior day.
The real question here is how is this being leveraged to buy something else?
Remember when those warehouses 'full' of steel were leveraged to buy all of Portugals gold, and then were found 'empty'? What ever happened to that story?
So, expect delivery of some 'precious' to China for a paper ownership of this copper, The coppers disappearance, and a ghost city appearing somewhere in China.
China has a looming demographic problem.
They could store wealth in dollars or hard assets. Trying to store in a FIAT currency on that scale creates a supply and demand problem.
So is it possible that all this stock-piling is per plan? I'd rather store excess wealth in tangible goods than in a FIAT currency.
china dont give a fuck about price. china want it all. china will sit on it for 1000 years no fucking big deal. china will buy all your price supressed metal for bargan. china no stupid. china has many worthless american dollar to spend. yippie kai yay mothafucka!
There is a very simple explanation for this....they ran out of Tungsten.
Not to worry, Marketwatch says "copper has lost it's value as an economic bellweather" and "how copper prices may be sending a false signal". That explains it. If the story fits, write it.
I think copper is destined to drop over a buck this year, from current $3.44 to $2.20.
http://stockcharts.com/h-sc/ui?s=$COPPER&p=M&b=5&g=0&id=p23150495428&a=296837857
[Can't make link work for some reason]
Yes China is stockpiling tangible goods. A poor idea in the short term but a good one for the future.
I heard Europe will send a comission to study how to grow an economy while consumption shrinks, it is composed of statisticians exclusively...
"Statisticians", you say? More opportunity to get to the truth, or to the other maxim: "Figures lie, and liars do a lot of figuring."
It's quite ironic that the word for copper in Latin is cuprum from which Cyprus got its name due to ts large copper deposits inearlier times.
Not a good week for some.
how would you write this story if they were storing gold or silver?
I pound on the desk stating it is in the best possible interest of the oligarchs in China and the U.S. to keep the balls in the air.
No collapse in asset prices. Short positions and long volatility no longer will work. There will be no more vol.
They will freeze the indices according to their notion and trim the sheep but not scare them away.
Nickels and commissions bot-gathered for the duration. I'm not saying it is right but the markets are Borg-ed and no longer human.
Would be a pretty good strategy if they are doing it right. Buy physical, hoard it, and then take out opposite positions on it. Do it right and there's zero risk. If it crashes, you make a bundle more from the positions. If it keeps going up, you have a shitload of a valuable asset. And if you're really smart, you corner the demand market so you can crash it and collect on all your positions, effectively lowering the purchase price to begin with while still having all the inventory. Pretty sweet eh?
I seem to recall the last time someone went looking for metal claimed as collateral in china, it wasn't there.
not having to rely on external sources for raw material during a world wide collapse of the monetary system would, in hindsight, look brilliant.
in all other cases it would, at least in china, reflect the inherent challenges of communistic central planning, purchasing and distribution systems.
the down arrow marauder strikes again.
:)
...love those pre-82 pennies...beautifully struck and reliably measured little copper wafers with just a hint of zinc. With copper at $3.45 they are worth about two and a half cents a piece. Imagine what the melt value would be during hyperinflation. Skim them while you can because they will disappear like pre-64 silver once people realize their intrinsic value. Nickels too. Poor man's stacking....
Offer bite sized chunks for sale to those who cannot afford PM.
M o n e t i z e it.
Chinese have quite a bit of history behind copper - exhibit A: Cupronickel: http://en.wikipedia.org/wiki/Cupronickel
Edit - Might also mean a repeat in Australia about questioning the production of AUD 5 cent coins given the price of Copper may once again make them worth more intrinsically then the face value of these coins. Bottom end of the scale as opposed to the USD $100 debacle with that restaurant on another ZH article. =/
"In May 2007, owing to the high market value of copper and nickel, the bullion value of the coin was about 6.5 cents, though there were no reported cases of hoarding or melting down of the coins despite the apparent 30% gross profit to be made from doing so."
http://en.wikipedia.org/wiki/Australian_five-cent_coin
If the copper is tarnished you can shine it up with ketchup.
"What happens to copper prices then when no more copper can be stored, either for functional or collateral purposes, is unclear, but if the Fed, BIS and ECB somehow manage to manipulate that market next, we expect it will go stratospheric."
And as a result, Kyle Bass' 20,000,000 nickel purchase will be rewarded...followed by the nickel disappearing from circulation as fast as a pre-65 dime.