Prices and Inventories are out of kilter — Prices for all the base metals are way higher than traditional price:inventory relations would imply.
Causes center on speculative/investment demand — Firstly, there is a short term influence. Investors are prepared to buy now in the expectation that markets will tighten later in 2010.
Secondly a structural influence — Increased long positions (investor buying) and reduced shorts (producer selling and speculators) create an imbalance which requires higher prices to attract sufficient shorts to balance the market.
Click on chart to enlarge, courtesy of Citigroup Global Markets.
The same virus can be detected in other commodities, here you can get much more insight about the oil markets ...