financing deals are starting to increase despite the relatively
poor returns compared with aluminum, a senior analyst at INTL
FCStone Inc. said.
Currently, the cash-to-April
spread on London Metal Exchange copper prices is in a contango
of $97, which is equivalent to a return of 1.4 percent, senior
analyst Edward Meir said.
For aluminum it is $70, or a
return of 5.2 percent, for the same period, he told delegates
April 25 at the American Copper Council meeting in
"Despite the poorer returns, the
rapid accumulation in copper stocks (in LME-listed warehouses)
suggests stockpiling schemes, especially with incentives
topping up returns," Meir said, referring to warehouse
companies practice of paying either side of $100 per
tonne in locations like New Orleans, Antwerp, Belgium, and
Johor, Malaysia, in order to attract metal into storage (
amm.com, Oct. 8).
Meir noted the rise in stocks in
LME-approved warehouses to 10-year highs, and the suggestion
that some of this metal might have been acquired by JPMorgan
Chase & Co. and BlackRock Inc. to offset the roughly
180,000 tonnes they will need on a combined basis for their
respective physically backed exchange-traded funds (
amm.com, Feb. 25).
But Meir said this is probably
not the reason for the rise in stocks, especially since the two
ETFs havent yet been launched.