COMEX copper stocks increased by 271 tons on August 21 to a total of 180,121 tons. This is the highest level the inventory reached in 13 years.
Being an often unnoticed component of the global copper inventory, what could this increase mean? Reuter’s Andy Home pointed out the upward trend observed since November last year, and this week’s rise in COMEX copper is another step higher. Back then, the stocks accounted for just 71,961 tons.
COMEX inventory, which pertains to how much copper stocks there are in a few locations in the United States, may soon become the largest single component of the global exchange stocks if the increase continues.
Trump election effect?
Some may think the rising COMEX copper stocks have something to do with Donald Trump’s election to the White House. President Trump promised to impose a U.S. border tax on commodities, including refined copper, which would be in favor of domestic markets. However, as that pledge has not yet materialized, the copper market has calmed down a bit.
Nonetheless, the climb in COMEX copper stocks signals a bullish global copper market, Home said. It is worth keeping COMEX stocks under the radar. They are becoming more relevant to copper prices and how the metal is priced. The COMEXstocks is also important to the relationship between the Chicago Mercantile Exchange (CME) and the London Metals Exchange (LME).
Meanwhile, copper reached over $3 per pound this week, which is the first time since November 2014. It traded on Thursday, Aug. 24, at $3.0480 per pound, Seeking Alpha reported. Other staple commodities also saw an uptick in prices over the past weeks, with iron ore hitting $75 per ton and crude oil reaching $47.50 per barrel on the nearby NYMEX futures contract. The increases are attributed to the improving global economic conditions, declining U.S. dollars and increasing demand from China.
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