Trader Holds $3 Billion of Copper in London

Who knows if it is true? What is for sure it will cause speculation which will be the aim, to drive volatility.

Aivars Lode

 

By TATYANA SHUMSKY And CAROLYN CUI

Bloomberg News

Copper soared to a new record of $4.2705 per pound on Tuesday in New York, and is up 28.3% this year. Here, the Cerro Verde copper mine in the Atacama desert near Arequipa, Peru.

As commodity prices soar to new records, the ability of a few traders to hold huge swaths of the world's stockpiles is coming under scrutiny.
The latest example is in the copper market, where a single trader has reported it owns 80% to 90% of the copper sitting in London Metal Exchange warehouses, equal to about half of the world's exchange-registered copper stockpile and worth about $3 billion.
The report coincided with copper prices soaring to new records on Tuesday. Commodities prices rallied along with stocks. The Dow Jones Industrial Average gained 55.03 points, or 0.48%, to 11533.16, its highest level since August 2008. Crude oil jumped to its highest level in more than two years and topped $90 a barrel in late electronic trading in New York. Corn and soybeans rose amid worries about hot weather in Argentina.

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r soared to a new record of $4.2705 per pound on Tuesday in New York, and is up 28.3% this year. The LME's three-month copper contract closed at $9,353.50 a metric ton, up 1.6% on the day, a new record.

J.P. Morgan Chase & Co. recently had a large position in copper, though it is unclear whether the U.S. bank increased its holdings, or whether a new player has taken dominant position.
"Regardless of who owns it, the only thing of note here is that we are being told that one person has a substantial position," said David Threlkeld, president of Resolved Inc., a metals consultancy.
Single traders also own large holdings of other metals. One trader holds as much as 90% of the exchange's aluminum stocks. In the nickel, zinc and aluminum alloy markets, single traders own between 50% to 80% of those metals and one firm has 40% to 50% of the LME's tin stockpiles.
While commodities exchanges scrutinize all holdings to ensure a single player isn't trying to corner the market, and many of the positions are owned by big firms on behalf of clients, the large holdings do result in a concentration of ownership that could skew prices.
At the same time, thousands of new investors are flooding into the commodities markets, either directly or through exchange-traded funds, seeking to take advantage of an expected rise in prices of raw materials as the global economy continues to recover.
While commodities regulators in the U.S. are considering restricting the amount of futures contracts any one trader can hold, they have no jurisdiction over physical holdings.
The LME has strict rules to prevent market squeezes but does not limit how much metal a single trader may hold. Instead, the exchange demands the dominant holder make metal available for short-term periods at very limited profit margins. The LME says it closely watches individual holdings.
Copper demand is likely to outstrip supply this year by an estimated 455,000 metric tons, says Barclays Capital. Copper inventories at the LME have been declining since February.
Consumption is growing rapidly in China, Brazil and the U.S. And the creation of ETFs to hold physical metal is helping drive demand. On Tuesday, ETF Securities, a London-based provider, said that its newly-announced copper-backed ETF has added about 850.5 tons of copper, up 43%, to reach 1,445.5 tons.
Last month, the LME reported that a single holder owned more than 50% of the exchange's copper. People familiar with the matter at the time said J.P. Morgan was the holder. On Tuesday, the LME reported that a single holder now has as much as 90% of the stockpiles, without naming the firm. The LME reports data two days in arrears, so the position increased on Friday.
In the aluminum market, about 70% of the LME metal is locked up, MF Global base metals analyst Edward Meir said during LME Week in London in October.
LME aluminum stocks currently total around 4.3 million metric tons.
As one example, Swiss commodity trading firm Glencore International AG bought about 1.6 million tons of the metal from United Co. Rusal Ltd. earlier this year, market participants said at the time. Glencore then turned around and presold the metal. So even though the aluminum is sitting in LME warehouses, visible to all traders, it is effectively locked up.
These sorts of deals have skewed physical trading in these metals, as other consumers have paid increasing premiums to get hold of stocks, even though the metal looked like it was available in warehouses.
Holding ready-for-delivery metals on an exchange isn't a cheap undertaking for traders, who are responsible for paying insurance, storage and financing costs. And "the end game is to find somebody to buy something you have already bought for a higher price," Mr. Threkeld said.
The recent boom in metal prices has enabled traders to purchase the physical metal, sell a futures contract at a much higher price and still make a profit after paying for storage and insurance.
—Andrea Hotter contributed to this article.

Snowfalls are now just a thing of the past! Not!

Mac, thanks for this article see the date March 2000! Classic,  Aivars Lode

 

Snowfalls are now just a thing of the past

By Charles Onians

Monday, 20 March 2000

Britain's winter ends tomorrow with further indications of a striking environmental change

: snow is starting to disappear from our lives.

Sledges, snowmen, snowballs and the excitement of waking to find that the stuff has settled outside are all a rapidly diminishing part of Britain's culture, as warmer winters - which scientists are attributing to global climate change - produce not only fewer white Christmases, but fewer white Januaries and Februaries.

The first two months of 2000 were virtually free of significant snowfall in much of lowland Britain, and December brought only moderate snowfall in the South-east. It is the continuation of a trend that has been increasingly visible in the past 15 years: in the south of England, for instance, from 1970 to 1995 snow and sleet fell for an average of 3.7 days, while from 1988 to 1995 the average was 0.7 days. London's last substantial snowfall was in February 1991.

Global warming

, the heating of the atmosphere by increased amounts of industrial gases, is now accepted as a reality by the international community. Average temperatures in Britain were nearly 0.6°C higher in the Nineties than in 1960-90, and it is estimated that they will increase by 0.2C every decade over the coming century. Eight of the 10 hottest years on record occurred in the Nineties.

However, the warming is so far manifesting itself more in winters which are less cold than in much hotter summers. According to Dr David Viner, a senior research scientist at the climatic research unit (CRU) of the University of East Anglia,within a few years winter snowfall will become "a very rare and exciting event".

"Children just aren't going to know what snow is," he said.

The effects of snow-free winter in Britain are already becoming apparent. This year, for the first time ever, Hamleys, Britain's biggest toyshop, had no sledges on display in its Regent Street store. "It was a bit of a first," a spokesperson said.

Fen skating, once a popular sport on the fields of East Anglia, now takes place on indoor artificial rinks. Malcolm Robinson, of the Fenland Indoor Speed Skating Club in Peterborough, says they have not skated outside since 1997. "As a boy, I can remember being on ice most winters. Now it's few and far between," he said.

Michael Jeacock, a Cambridgeshire local historian, added that a generation was growing up "without experiencing one of the greatest joys and privileges of living in this part of the world - open-air skating".

Warmer winters have significant environmental and economic implications, and a wide range of research indicates that pests and plant diseases, usually killed back by sharp frosts, are likely to flourish. But very little research has been done on the cultural implications of climate change - into the possibility, for example, that our notion of Christmas might have to shift.

Professor Jarich Oosten, an anthropologist at the University of Leiden in the Netherlands, says that even if we no longer see snow, it will remain culturally important.

"We don't really have wolves in Europe any more, but they are still an important part of our culture and everyone knows what they look like," he said.

David Parker, at the Hadley Centre for Climate Prediction and Research in Berkshire, says ultimately, British children could have only virtual experience of snow. Via the internet, they might wonder at polar scenes - or eventually "feel" virtual cold.

Heavy snow will return occasionally, says Dr Viner, but when it does we will be unprepared. "We're really going to get caught out. Snow will probably cause chaos in 20 years time," he said.

The chances are certainly now stacked against the sortof heavy snowfall in cities that inspired Impressionist painters, such as Sisley, and the 19th century poet laureate Robert Bridges, who wrote in "London Snow" of it, "stealthily and perpetually settling and loosely lying".

Not any more, it seems.

So now they are not sure if we have caused warming or cooling!

So if they are not sure what we humans have caused, then how can they know the solution? 


Thanks Mac, Aivars Lode

Posted at 10:00 AM ET, 12/20/2010

Freak pattern brings Europe record cold & snow

By Andrew Freedman

Same pattern supporting cold in eastern U.S.

One of the fiercest beginnings to winter on record has slammed Europe with relentless assaults of bitter cold and heavy snowfalls. The unusually wintry weather gripping Europe as well as the cold plaguing the eastern United States are linked by a historically strong weather system locked over Greenland.

Pedestrians walk during a snow-fall in central London, Saturday, Dec. 18, 2010. Plunging temperatures and heavy snow saw large swathes of Britain grind to a standstill, as London's Gatwick Airport closed its runway and British Airways cancelled flights at Heathrow. (AP Photo/Alastair Grant) (Alastair Grant - AP).

In Europe, the strange weather pattern has caused mayhem for holiday travel. Over the weekend, airport and ground transportation disruptions were widespread, from London's Heathrow Airport - one of the world's busiest hubs - to Frankfurt International Airport and the German Autobahn. According to the The Guardian newspaper, Frankfurt airport workers resorted to dressing up as angels in an attempt to calm the situation when crowds of stranded passengers, frustrated by lengthy delays and flight cancellations, became unruly. Heathrow, meanwhile, was closed to arriving aircraft on Sunday, after being closed altogether on Saturday, according to several news reports. More heavy snow is forecast for London yet again today according to the UK Met Office.
BAA spokesman Andrew Teacher told CNN: "These are absolutely ... freak weather conditions ... We've not seen a storm like this in 20 years."
So what has been causing this freak winter weather onslaught in Europe, and the colder-than-average conditions in much of the eastern U.S., including Washington?
There is a very strong "blocking pattern" in place over Greenland, which is helping to steer a parade of storms into the British Isles and mainland Europe, while pumping abnormally mild air into portions of the Canadian Arctic. In short - the atmosphere is jammed up like the Beltway at rush hour. Storm systems have nowhere to go, and are doing weird loop-de-loops up into the Canadian Maritimes, and even off the coast of the Pacific Northwest.

Temperatures relative to average in Wabush Lake, Canada (Newfoundland), on the warm side of the blocking high pressure system, have been much warmer than average as mild air invades the eastern Arctic. Source: NOAA.
Meteorologists with Environment Canada described the atmospheric circulation as "one of the most bizarre patterns in recent memory".
The high pressure cell parked over Greenland is not your ordinary High. It's unusually strong, and has boosted pressures, often referred to by meteorologists as "geopotential heights", in parts of the Arctic to record levels. For example, pressure typically found at about 18,000 feet above sea level have increased so significantly in recent days that it may have set several records, including the record for the largest departure from average for anywhere on the planet in any month of the year since such historical records began in 1948 (this analysis was performed by the Weather Channel's Stu Ostro).

Pressure or "height" departures from average over the Northern Hemisphere. Positive height departures (yellows, oranges and reds) from average are associated with warmer than normal temperatures and negative height (blues) departures are associated with colder than average temperatures. Source: NOAA.

These pressure or "height" changes can be clearly seen in the image to the right with the red shades near the southern tip of Greenland indicating the extraordinarily high pressure, as well as this animation, both from the Climate Prediction Center.
The circulation around that High is helping to pump mild air into eastern Canada, while locking unusually cold air in place in the eastern U.S., in addition to driving record cold and snow into the heart of Western Europe. According to the Associated Press, the snow and bitter cold may set a new monthly record for Britain:



"Britain's national weather forecaster, the Met Office, said the nation has experienced the heaviest snow falls in December in decades and is on course for record low temperatures. "You have to look back to December 1981 to find similar snow depths," forecaster Helen Chivers said. "If the second half of the month is as cold as the first, this will be the coldest December on record since 1910."

According to The Telegraph, Britain's current average temperature for the month of December is running five degrees Celsius below the long-term average for the month.
The cold and snow has not only disrupted holiday travelers. A Lady Gaga concert had to be rescheduled when trucks carrying the pop singer's sets could not make it to Paris' Bercy Stadium, the AP reported.
Might there be larger forces at work?
The current weather pattern is in part related to the North Atlantic Oscillation or NAO, which is a natural climate cycle that influences winter weather in parts of the Northern Hemisphere. When the NAO is in a negative phase like it is now, the likelihood of major snowstorms in the mid-Atlantic increases, as does the likelihood of winter storms in parts of Europe. The NAO was in an extreme negative phase during most of last winter, and has been negative recently as well.

The daily NAO index from September through December 19, 2010. Credit: Climate Prediction Center.
The current weather pattern may also be indirectly related to long-term climate change. Meteorologist Stu Ostro of The Weather Channel has documented a trend of increased occurrences of atmospheric pressure anomalies, such as the one observed above Greenland, and he believes these may be tied to atmospheric warming from greenhouse gas emissions.
Also, recent research indicates that Arctic sea ice decline may influence winter weather patterns.
According to the National Snow and Ice Data Center (NSIDC), November sea ice extent was the second lowest on record since 1979. "Typically by the end of November, nearly half of Hudson Bay has iced over. But on November 30, only 17% of the bay was covered by sea ice. Compared to the 1979 to 2000 average, the ice extent was 12.4% below average for the Arctic as a whole," an NSIDC report stated.
This year's "Arctic Report Card", issued by the National Oceanic and Atmospheric Administration (NOAA), found that warming water and air temperatures associated with the decline of summer sea ice has been raising the height of atmospheric pressure surfaces over the North Pole.

Warming of the Arctic may favor a pattern pushing colder air over the eastern U.S. and Europe. Source: Climate Central
The report noted that the winter of 2009-2010 featured "one of the three largest Arctic high-pressure events since 1850." These higher pressure surfaces are thought to change large-scale wind patterns and can lead to bouts of severe winter weather in the eastern United States.
"Models suggest that loss of sea ice in fall favors higher geopotential heights over the Arctic. With future loss of sea ice, such conditions as winter 2009-2010 could happen more often. Thus we have a potential climate change paradox. Rather than a general warming everywhere, the loss of sea ice and a warmer Arctic can increase the impact of the Arctic on lower latitudes, bringing colder weather to southern locations," the report stated.

2010

12

20

10

00

By Andrew Freedman  | December 20, 2010; 10:00 AM ET

Coldest winter weather this early on in the season since the mid-1800's

Global warming mmm?

Aivars Lode

Snow Hits Air Travel, Roads Across Europe

Associated Press

AP

Snow ploughs clear the taxi ways after heavy snowfall at Heathrow Airport.

LONDON — Blizzards and freezing temperatures shut down runways, train tracks and highways across Europe on Saturday, disrupting flights and leaving shivering drivers stranded on roadsides.
Airports in Britain, Germany, France, Spain, the Netherlands and Denmark reported cancelations or delays to flights.
London's Gatwick airport reopened late afternoon after 150 employees using dozens of snow plows worked to clear the runway, though officials warned flights would be limited and cancelations likely.

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REUTERS

Shoppers walk along Oxford Street, in central London.

ritish Airways canceled all short-haul flights from Heathrow Airport and said few long haul services were likely to operate. Snow forced the airport to close runways, but said one strip would reopen later Saturday, allowing a limited number of flights to depart.

"We currently have hundreds of staff working to clear the runways, taxiways, stands and forecourts and are providing blankets and water for passengers as we strive to get Heathrow moving," the airport said in a statement.
Conditions on British roads were treacherous, Automobile Association official Darron Burness said. "One of the biggest problems is that large amounts of snow are falling very quickly on to frozen surfaces, making driving hazardous," he said.
Hundreds of motorists were left stranded on a major road in northwestern England following a deluge, prompting police patrols to offer food and water to drivers.

Snow Falls on Europe

Cold weather continued to grip Europe.

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European Pressphoto Agency

Two men surfed in an artificial stream in central Munich, Germany.

In Italy, the Autostrada of the Sun — the country's main north-south highway — was jammed with hundreds of vehicles, whose chilly occupants slept in their cars, vans or trucks. Though snow had mainly cleared or melted early Saturday, the highway was still closed in one direction, with traffic backed up for nearly 25 miles (40 kilometers).
The snowfall also forced high-speed trains to bypass Florence's central Santa Maria Novella station, stopping in suburban stations instead.
Paris was sprinkled with a light coat of snow overnight, as many people prepared to set off on their Christmas vacations. More snow was predicted Saturday, leading civil aviation authorities to cancel 15 percent of flights at Charles de Gaulle airport between 4 p.m. and 11 p.m.
Many flights were also canceled in northeastern France, where snow already blanketed the ground, and services were also canceled at the airports in the cities of Nantes and Rennes.

Heavy snowfall disrupts traffic and flights across Europe. Video courtesy of Reuters.

Significant numbers of domestic and European flights were canceled at Germany's Frankfurt airport as it dealt with the disruption. Germany's railway operator Deutsche Bahn said it was pressing into service all the trains it could — though some journeys were subject to delays. "Everything that can roll is rolling," spokesman Holger Auferkamp told the German news agency DAPD.
The icy weather also swept over large parts of Scandinavia, causing problems particularly in Denmark, where dozens of flights were canceled at the airport in Copenhagen. According to Danish news agency Ritzau, train traffic between Denmark and southern Sweden was also disrupted because of track problems, partly due to the snow, forcing passengers to instead take buses between the two countries.
In Sweden, where media reports suggest the country is experiencing the coldest winter weather this early on in the season since the mid-1800's, several road accidents were reported, with more than 20 in the Stockholm area alone.
Retailers said the poor weather would likely dent sales on what it traditionally the busiest shopping weekend before Christmas. London's Brent Cross indoor shopping mall closed its doors early Saturday afternoon.