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A tale of two exchanges

Copper stocks on the two main metal exchanges have been moving almost continuously in opposite directions since the start of the year. As a result, LME stocks are at a 2-year low, but inventories on China’s SHFE are near a 9-year high. We expect total exchange stocks of copper to climb to the highest levels in a decade by the end of 2013, adding to the downside risks to prices.

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