The long and short sides operate in a routine of copper market or turn to short supply

Copper inventories registered on the London Metal Exchange (LME) surged by nearly 98,000 tonnes last week, adding 126,150 tonnes of warehouse receipts
to the LME system in just three days, Reuters reported.
Analysts believe that the sudden appearance of inventories may not be the only reason
why LME copper fell below $5,500 for the first time since January.
Some market participants believe that industrial metals were on the defensive last week, mainly due to the collapse of China's iron ore and steel markets, reflecting concerns about China's economic slowdown
.
But a 50% increase in overall inventories to 354,650 tonnes and a doubling of registered warehouse receipt inventories to 243,300 tonnes will certainly not boost sentiment
.

In recent months, LME copper inventories have become a battleground
between two opposing market views.
As the bulls and bears battle in the physical market, price signals are becoming more divergent
.
In the fog of this battle, what is overlooked is the interesting inventory changes
outside the physical market.
In fact, last week's jump in LME inventories coincided with the surge in warehouse receipts in early March, when registered receipts increased by 141625 tonnes
in just four days.
And as last time, the increase in warehouse receipts is mainly in Asian warehouses
.
Singapore, Busan in South Korea and Kaohsiung in Taiwan saw large increases, while Rotterdam in Europe also had some inflows, similar to the distribution of inflows in March
.
Also the same as last time, the scale of the inflow is so large, indicating that these are not actually "inbound" copper, but most likely copper that is already waiting in the warehouse to press the warehouse receipt button
.
Some of this is likely to come from some of the Chinese refineries authorized to process copper to convert copper concentrates to refined copper, because there is no 15 percent export duty
on copper after the conversion to refined copper.

China exported 426,000 tonnes of refined copper last year, still tiny compared to imports but the largest export ever
.
Refined copper exports in the first quarter of this year were 105,000 tonnes, with South Korea and Taiwan as the two destinations
.
Unfortunately, copper that has just entered the LME storage system is unlikely to stay
for long.
After that copper "stockpile" in early March, the LME's tradable stock (Opentonnage) more than doubled from 88,750 tonnes to 194825 tonnes
.
By the end of April, tradable inventories had fallen back to 121,250 tonnes due to continued warehouse receipt write-offs and subsequent reductions
in physical inventories.
This is the way it works, no matter how much the bears throw into the system, the bulls will receive all the orders, and then the actual goods will be transferred
.
In fact, the tug-of-war of long and short has long ended, only the stakes have been increasing
.

The next trend development is expected to be a decline in inventories, with the LME bears appearing to have run out of ammunition as this morning's LME report showed no new "stockpiles"
.
The current downward trend in the number of copper stocks registered on the Shanghai Futures Exchange further confirms this view
.
Most analysts say the copper market is now in short supply after years of oversupply
.
Such turning points have always been difficult to interpret, and trading is even more
difficult.