Single trader holds half of world's copper

[Recursion]

Some grist for the mill:

Connection Specifier (an EE trade mag) notes a WSJ report that a single trader currently holds half of the world's known copper stockpile.

Demand for copper is already set to outstrip supply for I believe the third year in a row. Unless new sources or new connection and cabling technologies are found (copper remains the workhorse of electrical connections and wires), electronic devices may be much more expensive in the near future.

[FreakinDJ]

1. let me guess - CHINA

on edit

same difference - "rumored to be J.P. Morgan Chase & Co"

their both working for the economic demise of the USA

[pscot]

3. Chase may be China's agent

I seem to recall reading that recently.

[FreakinDJ]

7. thats what I was thinking too

[Joanne98]

2. Ask Chase they know who it is.

J.P. Morgan Chase & Co. recently had a large position in copper, though it is unclear whether the U.S. bank increased its holdings or whether a new player has taken a dominant position.

"Regardless of who owns it, the only thing of note here is that we are being told that one person has a substantial position," says David Threlkeld, president of Resolved Inc., a metals consultancy.

[MadHound]

4. Gee, if we started a comprehensive recycling program,

We wouldn't be having this problem. Instead people just toss their electronics and other copper in the trash.

[Recursion]

5. That's what surprises me; salvagers pay for it

I haven't thrown out an electronic device in ages; just look up a salvager on Craigslist and get a buck or two for the thing. They make housecalls.

[shireen]

12. i stripped some copper out of wires

just for fun. It was from some old light fixtures. I was amazed at how much copper i recovered! It's very hard work with just a wire stripper, so i don't think i could do it regularly. But it's certainly given me a new appreciation for all those wires i used to throw away. From now on, i'm saving them and when i get a large enough pile, either sell it or give it away.

Some day in the future, our landfills will be turned into mines to salvage all the useful stuff we've been throwing away for over a hundred years.

[muriel_volestrangler]

6. not 'half of the world's copper'; 'half of the world's exchange-registered copper stockpile'

We find that LME warehouse stocks are 376,000 tons, which matches up with 80-90% of that being worth about $3 billion, as the article says.

But world production of copper is perhaps 15,000,000 tons per year. So this is about 2% of the annual production of copper - 7 or 8 days production.

[DCKit]

8. In other words, they simply have to buy and sell on a weekly basis...

to make another couple hundred billion a year.

By having the money to invest, they've MADE themselves the middleman, and profit off every ounce of copper sold. It's a real shame that WE loaned them that money.

OK, so that question is resolved. Now, who is profiting off oil, wheat, rice and all the other commodities where a big fat purse allows you to control global prices and to profit off every unit sold?

[muriel_volestrangler]

9. No, you've got that wrong

Their stockpile is worth $3 billion, and the price has increased 28% in the past year, so they're sitting on a profit of under $1 billion. They don't get to buy at the old, lower price all the time, and sell at the latest, higher price - they will have bought a lot of that at an intermediate price. They don't "profit off every ounce of copper sold"; they profit off what they themselves have bought and sold. Just because they own half of the exchange-registered stockpile, that doesn't mean that all trading has to go through them. Producers and consumers are still allowed to sell and buy from each other, without involving a company sitting on a stockpile.

Assuming it is JP Morgan Chase, then yes, there is the annoyance that the US government leant them money and they then make a profit with it. But that's the basic objection to the bailout, not anything to do with the copper market.

[Recursion]

11. Only if the holder bought it all at the trough

Which he/she/they didn't. And from what I remember corners on markets of commodities with heavy industrial uses work differently from corners on markets of specie.

[Recursion]

10. Yeah; I had tried to correct that in the body

But I was quoting the headline verbatim. Half of copper currently on an exchange (and upwards of 80% of the copper on the London Mercantile).

And the 15 million tons of copper produced this year will still not quite meet demand, as I understand it -- stocks have been falling for a few years now.