Reuters columnist Andy Home notes that its difficult to pin down exactly how much copper the SRB buys, and that the Bureau's practice of rotating out older copper stocks could put a dent in this year's estimated purchases of 700,000 tonnes. However, despite concerns about slowing economic growth from China, the writer suggests that SRB activity could mean the country has no intention to stop importing copper.What well-stocked SRB warehouses might mean for the copper price is another consideration, since stockpiled copper can't be "consumed" by industry in the traditional sense. Still, the Bureau's buying is an important indicator of demand. Supply delays Furthermore, expected ramp ups at some copper mines have seen delays this year, and exports from Freeport-McMoRan Copper & Gold (NYSE:FCX) and Newmont Mining's (NYSE:NEM) Indonesia operations were briefly stopped due to changes in concentrate export rules. While an October GFMS update points to producers regaining some of the momentum they lost in the first half of the year, the Times notes that increased mine supply has not led to a refined copper surplus. That's due to raw material bottlenecks caused partly by the situation in Indonesia and partly by a lack of smelting capacity in China. Rising impurities such as arsenic are also causing problems, since it's difficult for smelters to process the material. To solve the problem, producers often blend those concentrates with purer material, creating even more demand - for the right kind of copper. What's next? The ICSG has brought its prediction for a 595,000-tonne copper surplus in 2014 down to 393,000 tonnes on the back of higher apparent copper usage in China. Echoing that sentiment, the team at Thomson Reuters predicts that LME copper will average $6,500 per tonne for the fourth quarter, declining to $6,200 per tonne in 2015. However, not all in the copper space are in agreement on that front: while Ioannou also does not see a copper deficit next year, he sees copper prices holding higher in comparison to GFMS predictions, and Andy Home has suggested that a deficit could come even sooner.
To be sure, copper investors will be keeping an eye out to see whether Home is right. Although the writer admits that his bullish thoughts "might seem premature," he points out that others - including China's SRB - appear to be looking at a tighter market, and that's certainly worth taking note of.Let us know what you think by taking the survey below: View This Poll Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. Survey: Calling for a Copper Surplus? Not So Fast from Copper Investing News