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How tight is the Copper market? Implications for Chile

• The recent uptick of Chinese demand for copper and low levels of warehouse stocks give a misleading picture of the state of the copper market.
• Taking a broader view of stocks, we suggest that there is a substantial amount of “missing copper”, large portions of which are held by the Chinese State reserve Bureau (SRB).
• The policy of the latter in 2016 is therefore key to the performance of copper.