Copper Price Action, Fundamentals Still Weak

Reuters: Connecting the dots between weak copper demand growth and prices
"There's a disparity between prices and fundamentals. A reckoning is overdue," a source at a commodity trading house told Reuters ahead of the Cesco copper conference in Santiago.

"(Chinese) cable producers are not expecting a pick up in demand from the (power) grid, property funds are bearish and the inventory of air conditioners is huge, in the region of 40 million units, about 10 months supply."

The State Grid Corporation of China (SGCC) in the final quarter of 2015 went on a spree, buying cables to use up its budget, but that only cannibalized orders in the first quarter of this year, sources say.

SGCC has said it plans to cut investment to 439 billion yuan this year, down from 452.1 billion in 2015.
Respect the price action. The current rally is a big one, but it hasn't broken the downtrend begun in mid-2005.

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