Network Metals LLC

Despite the moderate gains in base metals last week, we are still seeing bearish signs, especially from copper producers. Apart from the cutbacks and layoffs of last week, today Asarco LLC announced that it is planning to shut its copper smelter for six weeks. The company will also implement 32-hour workweeks for a number of its employees, and these changes will be instituted immediately and with no immediate end in sight for the reduced hours. These are not news items that inspire much confidence in demand for copper and other base metals; for this reason the current uptick in copper prices does not seem sustainable. Continuing production cuts are a good indicator that these companies do not see demand increasing, and the current stockpiles will need to come down further before production can accelerate. Last Friday alone copper stocks in London rose 10,000 tons – please see below for month-long LME stockpile charts.