We warned two weeks ago that China’s “Bronze Swan” was looming as the crackdown on leverage in the system by Chinese authorities may be forcing unwinds of the CCFDs – thus putting upward pressure on Copper futures (unwinding short positions) and selling physical copper (which would mean procuring the physical metal before passing it on). Those effects were exactly what we had been seeing in the market until the end of August.
And now, it appears, as StockBoardAsset.com notes, exhaustion has started to set in across industry metals…
Barclays has also called the copper rally overhyped, while Bank of America Merrill Lynch said it’s the metal most at risk of a reversal, with the optimism of investors in financial futures disconnected from slow conditions in the physical market.
‘When you look at the state of the refined copper market, you certainly question why prices have risen so significantly,’ Snowdon said by phone from London.
This post was published at Zero Hedge on Sep 14, 2017.
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