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Copper Surges After Report Mysterious London Buyer Has Cornered Up To 90% Of Market
Copper prices are surging this morning (in the face of Goldman's recent warnings of a plunge), jumping 4 handles apparently on the heels of a WSJ story in which LME admits that a single buyer has snapped up more than half the copper held in London Metal Exchange warehouses, giving it control over a crucial source of supply and raising concerns among traders about the potential for higher prices. What is more remarkable is, as WSJ reports, on several occasions in the last month, this buyer held as much as 90% of the world’s copper stored in LME-licensed warehouses. Though no confirmation has been given traders suggest the firm cornering the copper market is Red Kite Group, a London hedge-fund manager that focuses on metals trading.
A single firm has owned at least 50% of the copper in LME-licensed warehouses for much of the last four months. Accumulating such a dominant position became easier in June because the amount of metal under the exchange’s watch had plummeted, as had prices. The warehouses have held less than 160,000 tons of copper since mid-June, compared with more than 360,000 tons at the start of the year. Some analysts say copper production is running behind demand, forcing some users to draw on stockpiles in LME-licensed warehouses.
On several occasions in the last month, this buyer held as much as 90% of the world’s copper stored in LME-licensed warehouses, equal to about 140,000 tons, or enough to make the copper parts of the Statue of Liberty more than 1,700 times. As of Wednesday, the buyer owned between 50% and 80% of copper held in warehouses, according to the most recent exchange data.
Rumors are that it is Red Kite...
Established in 2004, Red Kite is now run by two of its founding partners, Michael Farmer and David Lilley, both alumni of the German industrial conglomerate Metallgesellschaft AG, which collapsed in 1993. The fund is known for its bold and extremely profitable trades involving copper, as well as other metals. Red Kite Group manages $2.3 billion, according to its website.
Red Kite declined to comment.
The London Metal Exchange, owned by Hong Kong Exchanges & Clearing Ltd. , doesn’t limit how much metal a single trader may hold in its warehouses, and says that it has mechanisms in place to prevent market squeezes—a situation in which holders of a large share of the supplies use their position to jack up prices.
Some traders say the concentration of so much copper under one firm’s control is already driving up prices. It costs about $72 more per ton to buy copper for delivery today than for delivery in three months.
“There’s no reason for anyone to be holding 70% of the stocks of the commodity,” said Jessica Fung, head of Commodities Metals at BMO Capital Markets.
* * *
The Red Kite metals fund posted returns of just over 50% in 2013 after a well-timed switch from a short to a long position in the copper market around the time that prices posted their lows for the year, well-placed sources told Metal Bulletin.
Simply put, they were the market (buying it up in hopes to corner the market)...
The long position delivered returns as copper prices rebounded to finish the year up nearly $700 from its 2013 low, but Red Kite also made strong returns on physical inventory and spreads as copper premiums jumped in Asia and the LME forward curve moved into backwardation, market sources told Metal Bulletin.
"The Red Kite switch was definitely up there as one of the big trades of the year; the volumes were huge," a source active in the copper market told Metal Bulletin.
At the time, sell-side analysts in particular were turning strongly bearish on the copper market, reacting in part to lagged evidence of the slowdown in demand that prompted Red Kite to run short positions around the start of the year, sources said.
"Good data is very hard to come by in the copper market, and at the time I think a lot of people were trading looking in the rear-view mirror," one observer of the company told Metal Bulletin.
* * *
Summing it all up - Is Red Kite the next Amaranth?
* * *
The irony of someone cornering another metals market a week after the death of Nelson Bunker Hunt is not lost on us.
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Bunker Hunt is alive!
Start a rumor and force a short sqeeze. Someone is laughing all the way to the bank (or in it).
Is anyone supposed to give a fuck what Jessica Fung's opinion on this matter is? If they stick with it, they're gonna make a shitload of money. But their profit may end up being 'nationalized'.
Something doesn’t sound right here.
Barrick alone expects 2014 copper production to be something over 200,000 tons.
http://www.barrick.com/operations/
This is the real 'short-bond' trade.
Amaranth 2.0 in the making here folks...... Grab some popcorn and a few put options and watch
PBOC, Russia, Vampire Squid or Twinklevoss twins?
Wow, Tyler, copper's up 1%! That really is exciting :-)
metals market manipulation??? That's hilarious...only conspiracy nuts believe in that. It's just a spook story that metals stackers tell their kids at night...try to manipulate the metals market and Keyser Soze will gitchya.
We all know there's no such thing as manipulation of metals markets....sheesh.
;-)
No way to corner copper, after dropping under 3$ this story sounds like desperation..
Agreed. 25 yr chart shows, for long period, trading range _top_ at USD 1=50. Went to USD 1=50 again in 2009. Recent years price activity looks like speculative blow-off starting 2005, slightly surprising not yet collapsed - effect of ultra-low interest rates? To me, when it goes, it halves back to USD 1=50. And anyway, a rise of 1% is _not_ a surge. Watson
It's not about production, its about driving the market. London market is easiest to rig and the rumor is now running. Muppets roasting on an open fire.
<--- The East: China, Russia, India
<--- The West: Soros, Buffet
Which of THESE is most likely to have done it? BTW. I'd have added GS to the list, but Squid Vicious only corners paper and politicians, not hardware.
It is funny how this happens with a base metal, one that is linked with gold production and the greater faultering economy, but oddly, with gold and silver physical demand hitting record highs, there is no mystery man cornering these markets. Maybe its just the Fed again.
Guessin the derivatives on copper are relatively less than gold and silver
maybe they should change their name to Copperman Sachs
Copper is underrated as a value store but only if there is demand or in this case, if you can herd the market.
Actually its Yasuo Hamanaka twin brother in laws second cousin
http://newsfeed.time.com/2012/05/11/top-10-biggest-trading-losses-in-history/slide/5-sumitomo-corp-3-5b/
Hey, isn't that ill..ah fuck it. Nevermind!
I'm sure our regulators will get straight to the bottom of this.
Whats next? Warehouse chicanery in the PM markets?
Whorehouse chicanery more likely.
This is a suicide mission. Silver is one thing but there is billions of tons of copper in Argentina alone.
Refining the ore is expensive...so this price action will get those ships moving that's fer sure.
One meteor that landed a billion years ago sitting on the ocean floor is enough to crash the price however. Trade this move at your own risk.
Energizer bunny?
Did he really say Red Kike Group?
Yup that was an obvious one ...
A "kite" is a type of shield ... so Red Shield is Rothschild... or maybe they just want us to believe that.
http://www.rkminefinance.com/index.aspx
http://www.globalminingobserver.com/red-kite/
kite is also a bird of prey.
there is nothing more exciting than watching the phony paper price of Silver trade in a 2 cent range throughout the day...
Almost as fun as watching the zombie indexes get slowly pumped to green!
Almost......got it.....just.....a bit......more....
OK so how long till 'the warehouse' is discovered to be empty?
...and the price crashing to zero along with it.
CNBC: It's easy to see what happened here. There is no copper left, so the price must meet with supply. No supply means a price of zero.
Only word that comes to mind: China.
Was glad to see the name Bunker Hunt above though.
Fifty bucks an ounce AND interest rates at double digits!
Those were the days!
"Only word that comes to mind: China."
My money is on the Rothschild banksters.
An American, not US subject.
But then I used to think that the Fonz was cool.
Demand delivery in full.
That woild roil the paper markets. Probably 100:1 paper. Same with gold and silver.
Sure no problem.
This is a thousand foot long ore ship where do you want it?
Rehypotheticated for repo market and interest rate swaps.
Same with oil and anything else.
For oil $80 wti seems to be the margin call threshhold. Strongly defended, until sacrificial lambs run out of customer's money
TRIPLE LEHMAN
greetings, ekm1..
speaking of commodities
question....with the coming storm...what 3 commoditie would you have on hand for barter to survive and prosper with...
thank you...
The storm will be only for insolvent elite.
It depends on how much money you are trying to protect.
For us sheeple, there won't be any difference.
Paper cash is first choice
Silver.
Anti bacterial.
Also cotton.
No way am I trading beef. Holsteins and milk have gotten crushed because of these debt clowns.
Whiskey and weed.
Yo mamma's basement?
Must be a big basement!
So can we count on Dr. Copper to say anything about th economy then? Probably not and with this revelation, one has to assume the same sort of crap is going on with oil too but the reverse there. The surplus has been dumped in that case but not here. This is strange because I kept reading posts on this very site that claimed the Chinese would be deleveraging copper as the commodity finance game blew up.................
So go ahead and buy bitch.
Goddamn right! Take delivery too!
That'll be 25'000 DOLARES a DAY while we're waiting...
Damn that Son of a Hunt!
Do those two idiots a favour and just cut their dicks off now.
Cunt Brothers
SQUID
didnt china buy LME?!. and what about all that china deal with cooper as a colederal for credit?
Get yer paper copper, step right up, get yer paper copper...
The Red Kite Group ("RK") was founded in 2004 and is one of the world's largest metal-oriented investment groups.
RK has a significant presence in the physicals market as a global merchant. RK purchases, finances, insures, transports, processes and sells a mine's output to end customers.
The Group has a worldwide presence, with offices in Hamilton, Hong Kong, London, New York, Shanghai and Sydney.
http://www.rkminefinance.com/
Then there is RKC...
RK Capital Management LLP (“RKC”), a limited liability partnership organised in England and Wales and authorised and regulated by the UK Financial Conduct Authority (“FCA”)(FCA number 409049).
The ghost of Bunker Hunt has come to haunt the markets.
Squatters Technology: Seeds Among Thorns
The US Constitution promises to respect the pursuit of life, liberty and happiness, by providing a bait and swap Bill of Rights, as a moving target defined by the State, arbitrary bundles of empire citizenship rights to the extent you pursue property encapsulation and exclusion, to feed the mortgage ponzi.
That’s what the Ohio Co of Cutthroat Associates built on the ground, while Hamilton and Jefferson struck the latest new deal, penned by Madison. The critters, including Benjamin Franklin, were already making designs to appropriate and sell natural resources all the way to the Pacific, from London, to pay empire debt in Europe, before the Boston Tea Party and Indian revolts.
Peer pressure has always been about controlling the means of production to the end of extortion, new world always the same as the old, mortgage queens always in need of a scapegoat. America was just another passive aggressive science project in human farming, where ‘every man trys to ruen his neighbor’ in ‘a swill bucket for speculators.
George Washington squatted on 50,000 acres across 6 states, and otherwise was a lousy general with a good engineer, who was also a speculator, serving as a middleman for a King with mouths to feed and nothing but promises in the Bank. Greed just got away from them, because natural resources were so abundant in North America, and pretty soon ‘everyone’ wanted to be King, of his own property, to maximize rent, trading one tyrant for many.
Hamilton employed the process to print money, and Jefferson’s habits merely served to neutralize the opposition. Greed works, to collect and consume the participants, from depravity and insecurity. The empire world is always going to hell in a hand basket, but that doesn’t mean that you have to follow.
If you free-feed critters into domestication, they get fat and stop having children as natural resources decline. The easiest way to recognize an event horizon is the possessions it covets. Run a dc circuit in a closed container swapping O2 out and CO2 in under heat. Smartphones are ironic on many different levels.
Squatters warring with squatters, over artificial scarcity, is the ever-present noise of empire gravity locking the majority into the past. Gearing humanity to arbitrary gravity produces fascism, a self-regulating, possession-centric democracy, fitted into shrinking boxes, increasingly isolated from nature. Congratulations, they did it to themselves again.
“When we have land to labor then, let us never wish to see our citizens occupied at a workbench, or twirling a distaff.”
Debasing a currency for profit, with demographic arbitrage, is the well-worn path of passive-aggressive history. California’s gold rush became the Internet rush, leverage upon leverage, choking itself, as an example followed by the rest of empire, chasing its own tail, same as always.
Isms are reactions to isms, netting roughly 180 degrees dead wrong, at some speed, and the status quo buffer of no change is their best possible outcome. No matter which ism you choose, it will be buffered, to grow the buffer. Contract civil law marriage is about doing as little as possible, for as long as possible, at the greatest possible short-term profit.
The squatters squat arbitrarily, upon the assumption of scientific certainty, an oxymoron, and the result, a politically manufactured majority, wakes up far too late, with money yoked to real estate inflation. The critters can’t pass go because the meter-second of that pendulum is relative, to gravity in the return line.
Public education destroys the currency for the sake of maintaining the mythology that wealth is a function of controlling and redistributing natural resources, across artificial borders set up as toll booths, exporting natural resources out of the community and stupidity back, with conservation easements, eliminating natural employment. If you confront its superstition, it can only lock up, attempting in vain to confirm itself, until you unlock it.
If you want to allow juveniles in a Bay Area bar to zone you into extortion, that’s your business, but labor has better things to do than entertain a compromise among squatters, in a get-them-before-they-get-you world of artificial scarcity, bred by public education, security in a shopping mall survey.
The empire gears its world to favor stupidity, by exploiting labor for the purpose, and can’t find labor when it needs it, surprise. Labor doesn’t work for Queen and Country, to throw its children into the vacuum of stupidity without skills.
Squatter technology, money and war, what passes for public education, are juvenile derivatives of depravity, supply-side demographic arbitrage. Building technology on the fly to create economic mobility requires talent, which is ruled out by empire, in its Squatters Ponzi.
Old men with plenty of resources denying young men jobs, to curry favor with the Queen, and young men wasting their time revolting, is pretty D stupid, but that’s what is holding up the sh-show, which is neither here nor there to labor. Spending more than 25 hrs/wk playing monopoly with juveniles makes no economic sense. It’s not a negotiation.
Gravity has its uses, but not at any price. Insurance hedging simply hides cost, dead inventory, until it can’t. The central bankers have no exit, unless you give them one.
You're on a slippery slope there, denigrating some great minds who gave us the liberty we've squandered away in the past 100 years or so.
Most of that historical record has already been edited out where it conflicts with what TPTB wish Americans to think. An modest example of that slippery slope that has already been purged from the record:
Benjamin Franklin 1789.
Statement in the Convention, concerning Jewish Immigration:
"There is a great danger for the United States of America, this great danger is the Jew. Gentlemen, in every land which the Jews have settled, they have depressed the normal level and lowered the degree of commercial honesty.
They have remained apart and unassimilated — they have created a state within a state, and when they are opposed they attempt to strangle the nation financially as in the case of Portugal and Spain.
For more than 1700 years, they have lamented their sorrowful fate — namely, that they were driven out of their motherland, but gentlemen, if the civilized world today should give them back Palestine and their property, they would immediately find pressing reasons for not returning there. Why? Because they are vampires — they cannot live among themselves; they must live among Christians and others who do not belong to their race.
If they are not excluded from the United States by the Constitution, within less than 100 years, they will stream into this country in such numbers they will rule and destroy us and change our form of Government for which we Americans shed our blood and sacrificed life, property and personal freedom.
If the Jews are not excluded, within 200 years our children will be working in the fields to feed the Jews while they remain in the Counting House gleefully rubbing their hands.
I warn you, gentlemen, if you do not exclude the Jews forever, your children's children will curse you in your graves.
Their ideas are not those of Americans even when they have lived among us for ten generations. The leopard cannot change its spots. The Jews are a danger to this land and if they are allowed to enter they will imperil our institutions — they should be excluded by the Constitution."
http://www.sweetliberty.org/issues/wars/nameless/18.shtml
Rothschil, red shield, red kite... cant make this shit up.
Red Kite Group looks to be an obvious front - who wants to bet for Goldman's Sacks?
probably accidently cornered it trying to set a floor on the price
Thats possible. Again..."here comes delivery." Make a lot of pots and pans I imagine. Long Swedish Chef's!
Yes, so what are they going to do now? They cant sell (derivitives). So now they are caught. We might just see if there are any central banks behind this.
Whats in your wallet? Red kite.
more like Gartman went short of copper.
As a silver investor, I fail to understand how limited supply factors in to the price here.
\s
They didn't make that.
Anyone still believe ANYTHING Goldman says? Anyone?
Will ammo prices rise?
Yes ammo will rise ... copper is the best guilding metal and such is needed for velocities over 1250 FPS unless you want seriously fouled barrels with lead...
I'll stake a wedge that there is a connection here with Goldman, if only in insider trading BULLSHIT.
Muppets slayed again.
This would be one of those times you raise margin requirements.
time to go pre-82 penny mining
Start draining the fountains at shopping malls. I hear there is a gold mine there.
I'm going to need much higher prices, before I begin this phase of my operation
Been doing that. But I didn't think that would have such an impact on the market. Tsk tsk, my bad.
About as trustworthy a source as my wife's gynecologist, Dr. Coppa Feel.
Mysterious London Buyer - LMFAO. It's just yellen fucking around as usual.
yellen spews on Wednesday at 2p - drive USD down, pump major commodities and push US indexes higher
Looks like the work of that evil genius, Cupric Copperass. Where's 007? Still trying to shag that Pussy Galore bitch after 50 years??
Article purports to be cognisant of the supply - demand situation for a commodity, information that only the 0.01% who are manipulating have. Don't bet any real money on the proposed outcomes.
Extremely smart move from Red Kite. I don't think they lose on this.
A run on silver would be even smarter. If I had a billion I would do it in a heartbeat, just bring in the trucks and take delivery.
Natural gas looks prime for this type of raid as well.
http://winteractionables.com/?p=15956
Is that a chart of a .04cent move in Copper?
Isn't a 4-handle move 40 cents?
Does anyone think that much has changed in the past 100 years?
BIG TRUST CONTROLS THE WORLD'S COPPER(1901):
http://cdnc.ucr.edu/cgi-bin/cdnc?a=d&d=LAH19010412.2.36
at 4km/second a moscow nuclear icbm would get 2500 km away to hit london in 6500 seconds plus launch and climb time.
that's no more than 15 minutes. why don't moscow and london just nuke each other??? then the rest of the world can just skip world war 3 and we can all just move on to global government as a deal between the imf and shcc. if you use nukes in kalingrad, it's less than 10 minutes away from london.
each side, takes a hit---moscow and london both evaporated------as a sacraficial token to the unpleasantries of comprise that will necessarily result from ww3, and then we just take a ride to go and collect 200 dollars while skipping the resl ww3.
edit; if there are nukes in kaliningrad that's only 1750 miles to londong
think about it. just 15 minutes work and a boom boom and we can skip all this blustering and pretend war.
Vaporize London and Moscow???... in the same year???
We would reminisce for years over the past and fond memories of the sweet smell of old fashioned farts, rather than the stench of the then-poisoned atmosphere.
Corner.. surge... from 3.03 to 3.07... ARE U KIDDING ME ?
No shit, I looked at that chart and then was thinking maybe KWN had hijacked the story.
To think some people wondered why I buy copper rounds and bars.
It just adds color to my vault.
Bunker Hunt had so much silver he turned blue?
Time to release the US foreclosure/demo stockpiles and eastern european scavenger "reserves".
Takes a lot of copper to wrap up the elites bunkers, but is the only thig that can offer enough protection against what coming.
The vatican bunker is wrapped in gold, but they have been lied to.
Only copper can save you
i really despise the phrase "snap up". I understand why it is used. Maybe it's just me, but I perceive it to be the most overused term by anyone in the financial arena. seems like every day i read the WSJ and other financial news things I seem to come across the term 10 or or more times. just a pet peeve i guess...
the fed bought it to avoid deflation
Here Here Hemaroid, +1
I'm short a couple contracts of copper and I say bring it on. copper is up but not really 'surging." With all that is happening in the world and the RSI on copper at the level it is I would rather be shot than long. The biggest problem a short currently faces is getting a good price to roll into contracts further on out.
You might get shot by Quince Edward IV, if you are short too long.