Shanghai Copper Pipeline

While the rest of world enjoys the sovereign risk, Gods of Wall Street, volcano ashes etc. ... I made a step back and looked at Shanghai copper pipeline ... with Shanghai stocks here and copper here.

The break of 50 day moving average is a BUY call for Gods on Wall Street for the stocks ...

Standard Chartered in its Commodity Outlook writes today:

Meanwhile, China’s unwrought copper and copper product imports also rose 22%y/y to a record 456.2kt in March, implying around 365kt of refined copper imports.We believe that domestic copper inventory levels, which are still rising at Shanghai Futures Exchange warehouses (Chart 2), and potentially huge unreported stocks held by trading firms and consumers (possibly 0.5-1.0mt), are not a cause for concern, given demand forecasts. As we expect China’s refined copper consumption to rise by 16% y/y to 6.85mt in 2010, the highest level in history,these inventories are likely to be easily absorbed by mid-Q3, even on the highest estimate of undisclosed stocks. Following our recent visits to consumers along the business chain – from semi producers, cable and wire makers to home appliance manufacturers – incoming orders have significantly increased m/m. Capacity utilisation has improved notably, particularly in the home appliance sector.

Click on charts to enlarge, courtesy of Standard Chartered.

So, you know that expectations are not only on Wall Street ...