This would tend to point toward Trafigura attempting to manipulate at minimum, perceptions, and possibly manipulate markets. More after the jump.
From Bloomberg via Yahoo Finance, September 13:
Copper stockpiles immediately available to withdraw from the world’s top metals bourse hit the highest in almost two years, adding to evidence of flagging demand.
On-warrant copper inventory held by the London Metal Exchange rose on Wednesday by 5.7% to the highest since September 2021, according to bourse data. That’s a sharp turnaround from just three months ago when stocks fell to the lowest in almost two years.
Copper bulls have been disappointed by the metal this year after predicting a rally driven by a revival in Chinese demand, consumption by green technology and tight supply. Instead, prices are close to little changed year-on-year, after giving up earlier gains.
While warehouse inventories are sometimes used to gauge the mismatch between supply and demand, they can be impacted by individual trades and idiosyncratic market strategies. Still, the figures are just the latest signal that the copper market remains well supplied.
Treatment and refining charges by smelters remain high, an indication the raw materials used to make refined copper are relatively plentiful. China — the world’s top copper consumer — has been posting weaker-than-expected economic data that’s also weighed on the metal....
....MORE
Some history of strangeness by the big trading house:May 31, 2023
I Wonder If Trafigura Was Trying To Manipulate The Copper Market in January?
Here's the story as it was told at the time:
January 18 2023
"Trafigura plans to take large amounts of LME copper"From Reuters via Mining.com:
Commodity trader Trafigura is planning to take large amounts of copper from London Metal Exchange registered warehouses, two people familiar with the matter said, adding that the metal was likely to remain in Europe.
Copper stocks in LME registered warehouses stand at 83,325 tonnes are already low. Cancelled warrants – metal earmarked for delivery – stand at 31.2% or 26,000 tonnes. This compares with 12% on Jan. 3.
Most of the cancelled warrants – 20,600 according to the latest data from the LME – are in Rotterdam, Netherlands....
....MUCH MORE
And January 19, 2023
Regarding Trafigura Taking Delivery of LME Copper
Following on yesterday's "Trafigura plans to take large amounts of LME copper", I'm not saying the big trader/producer is attempting to corner the market but if they were...
First, a couple definitions from a 2012 post, "The Paradox of Profit Margins and Another Look at the Theory of Everything":
...If you're interested in the effect of hoarding on commodities prices Janet Netz, PhD did a paper I liked, "The Effect of Futures Markets and Corners on Storage and Spot Price Variability". I'll see if we have an ungated copy.
Remember, the spectrum runs from storage to hoarding to market corners.
And corners in commodities refers to physical, you can't corner a commod by simply buying futures or forwards, you also have to take up the physical supply.
Conversely, squeezes are accomplished in the futures..
A couple decent papers on this aspect of the abundance theory are:
"Large Investors, Price Manipulation, and Limits to Arbitrage: An Anatomy of Market Corners" and
"Market Manipulation, Bubbles, Corners and Short Squeezes"
The only way to combat abundance is with artificial scarcity, i.e. manipulation....
The paper from Professor Netz is here:
"The Effect of Futures Markets and Corners on Storage and Spot Price Variability".
Over the years I've mentioned the snappy little paper (12 page) with the above title, but only yesterday realized we had not linked. Time to rectify the oversight. Here's a copy via Wharton...And possibly also of interest:See, the thing is, Trafigura has lots of sources of physical copper, but instead of going to producers they went to the LME. And just to make things curioser and curioser, less than two years ago they sold an actual copper mine that they owned (we happened to catch the purchase some years earlier). Which was followed a few months later (October 2021) by "Trafigura Played Key Role in Draining LME Copper Inventories".
So here's wishing them luck if that's what they're up to because if a corner is big enough and is broken, all sorts of things can ensue.
Boston Fed: In Which A Copper Speculator's Attempted Corner Causes A Stock Market Crash
And in October 2021:
"Trafigura Played Key Role in Draining LME Copper Inventories"
