Network Metals LLC

Given the state of copper prices over the past few weeks, and what we have been saying regarding the sustainability of the rise, it should be no surprise that we are hearing from a number of copper producers that they are placing a lot of forward-sell hedges around the $4500 level. Though inventories have continued to drop over the past weeks and cancelled warrants are up (copper cancelled warrants are up to 20%), bearish signals from China (such as the treatment and refining charges we spoke of yesterday) indicate to us that we will see further bottoms for copper. With this in mind, it is useful to look at the Shanghai Futures Exchange copper stockpiles, which are up 27% in a week.