Copper and zinc dropped for a second consecutive day in London amid concern rising global interest rates will curb demand for metals.
Copper Consumers Seek More Talks With LME
over record prices for the commodity and the way it’s traded on the exchange.
Consumers want to look at the way the LME functions in terms of hedging, price discovery and the physical market, said Simon Payton, the council’s secretary general.
Hedge and pension funds have been targeting copper and other commodities, seeking better returns than from stocks and bonds.
No kidding, eh?
This might be a lot of fun for people who love to play their little games with the commodities market, but this is making stamping a living out of brass or copper a total crapshoot. My customers won’t accept the price increases I need to get for this stuff. Never mind the fact that I have no other choice …
“Prices are very bad, very difficult,” Centner said in an interview yesterday. “The financing aspect, the working capital issue, is becoming a nightmare. In general the copper business is built on credit.”
About 85 percent of total turnover on the LME may be derived from funds rather than from normal industry business
The LME has said that it strives to provide “an orderly market” for metals and would take action if it identified any cases of manipulation. An LME spokesman wasn’t available to comment for this article.
“it’s difficult to change the rules because it’s a free market and they can’t forbid funds access to the market.”