Fortunately for a physical market that is otherwise desperately quiet, the Chinese are taking sizeable tonnages. We reckon at least 100,000t of copper is being shipped to China, some of it may be going to the state reserve, though it is impossible to get confirmation. Most of it is coming out of LME warehouses in Asia and the US - even from the 'roach motels' on the West Coast. Much of it has yet to arrive on the other side of the Pacific. This prompts some concern. China's recent imports have already been massive, with a 51 percent jump in May alone. There are already signs of rising stocks, with holdings on the Shanghai exchange lifting again. Till recently they were nearly 200,000t below peak. And there may be growing stocks in the hands of traders and fabricators in the Shanghai region. Though the LME/Shanghai arb (see chart) has come a long way off its April peak, however, it still has a way to go to match the lows of last year.
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