Copper inventories are finally dropping from multi-year highs at the LME, but the levels are still very elevated. As the chart below shows, the inventory levels are usually at the lows around the summer with building burning inventories the most during that time period.
While copper prices remain strong at over $3/lb, Freeport McMoran Copper & Gold (FCX) remains a difficult stock to buy as high inventories could easily push prices lower. Freeport offers an attractive dividend at 4.3% so its definitely worth keeping an eye on at these levels. At some point, increased homebuilding in the US should help burn inventories. Until that happens, this stock might not go anywhere with the slowdown in China.
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