Not here, of course. In China.
“Private stockpiles, built by many including the much- vaunted, pig-farming speculators, have clearly absorbed substantial quantities of metal,” Sucden’s Goldwyn said. “Much of this metal will remain out of the normal market place.”
Scotia Capital Inc. analyst Liu Na highlighted the role of Chinese pig farmers and other private speculators in the metals markets in an Aug. 17 note that cited reports from state-owned China Central Television. These speculators may become “quick sellers” if sentiment turned, Liu said in that note.
To be sure, Sucden’s Goldwyn wrote that the stockpiles of copper and nickel held by farmers and others in China may “not be ‘dumped’ back in the foreseeable future as some have recently suggested, wherever prices go.” Goldwyn didn’t give a reason.
The metals holdings by pig-farmer investors and other private speculators give “the impression that there is strong demand in China,” said Jiang at Shanghai Oriental. “But it is actually those who take a pessimistic view of the economy and are looking to preserve their wealth who are buying.” [More]
The fact they are not plowing profits back into the industry is telling, I think. If you are extracting wealth from your business, it certainly does look like hog expansion in China will be slower than it could be.
Of course, there are myriad other explanations for this pattern, one of which could be some kind of Internet scam or a Bernie-Madoff socially centered investment analysis where if a few of your friends are buying copper, then you get on board too. Instead of the NYC and Miami Jewish community, this one is pig farmers in China. Pure guess.