GREY:LCPRF - Post by User
Comment by
WallaceWilliamon May 28, 2014 3:03am
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Post# 22604072
RE:Update
RE:Update
The breaking news in the copper market is the return of China’s State Reserve Bureau (SRB) as a buyer. The SRB manages the strategic commodity stockpile in China. It is most likely to look at purchasing copper from the mountain of metal sitting in Shanghai’s bonded warehouse zone after the copper price plunged to a three-year low of US$6,321/t in mid-March
Net purchases are expected to range from 200kt to 350kt with purchases targeting the copper stocks linked to the nearly-expired financing deals. The buying plans are part of the ongoing purchase scheme to build copper stocks to 2Mt by end-2015. AME estimates the SRB currently holds around 1.2-1.3Mt of copper on hand. As the current spot price is still lower than the target price (US$7,000/t) set by SRB, it is likely that SRB will bring forward its 2015 stockpiling plan to take advantage of current prices.
Chinalco’s flagship 330ktpa Toromocho operation, which kicked off in December 2013, was forced to shut down in late March after the regulator found the effluent discharged was contaminating two lakes. The operation resumed production in mid-April and AME estimates the production loss at around 10kt with additional capital investment on waste disposal facilities.