Happy Sunday from sunny Greece and welcome to a very special jubilee edition of Steno Signals.

Let me start by dwelling on the fact that Macro generalists such as myself and Thorsten Slok of Apollo suddenly spend countless hours watching Copper trends. It is probably a red flag in itself, but it just seems like these developments are so INCREDIBLY important for global macro- and geopolitics these months.

We have been all over the Chinese copper story in recent months and also traded it with good luck, but we have admittedly been wrong in our call for a weaker CNY (so far).

Our charts on Chinese stock levels of Copper have made the rounds in recent weeks and we have mostly attributed the rise in stock levels to a strategic purchasing strategy from the Chinese authorities either ahead of 1) a devaluation, 2) a major overhaul of the electrical grid or 3) a global power grab on supply chains for EVs, Wind-turbines and Solar Panels. A combination of factor 1) and 3) now seems most likely and judging from copper TCs (refiner charges), we are currently amidst a material lack of copper concentrate.

The next few weeks will be absolutely vital for Copper markets as the Yangshan Copper Cathode is now traded with a DISCOUNT to LME spot, which is exceptionally out of the ordinary.

It basically means that China sits on the marginal copper reserves in layman-terms, and as they are now incentivized to export stocks of Copper, we will see whether they will decide to export Copper or whether this is indeed a deliberate strategic power grab on supply chains.

We are betting on the latter. See more below..

Chart 1a: Yangshan Copper Cathode trading with a discount to LME spot!

Chart 1b: Chinese copper stocks are extremely seasonally elevated