TSX:TECK.A - Post by User
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tracktimeon Nov 29, 2015 1:28pm
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Post# 24336370
WSJ story about copper trading in China
WSJ story about copper trading in ChinaThis story is a little over a monh old but it gives a very good description of what has been happening in the copper futures market in China.
Something worth taking note of near the bottom is the point made about the incredibly low warehouse invenories. This is a major disconnect in the market. Obviously this kind of disconect has been going on for months and is impossible to predict when it will end.....however....it will end at some point and there will be a massive short covering rally to correct the price/inventory relationship.
https://www.wsj.com/articles/chinese-copper-trading-surge-shakes-up-market-1445194548
My earlier post regarding the Chinese producers cutting back production and making a choice not to deliver the metal into the major short positions is likely the start of the correction of this disconnect. In the event the Chinese government does start buying large amount of the metal and does start aggressive investigations of the shorts it could be a spectacular rally.