Copper and Returns -- Is the party coming to an end ?

Lately Copper has been one of the commodity on everybodys mind, may it be Wallstreet Journal or the Main Street Daily.Every time we hear a commodity breaking a new high, China gets away with all the credit and applause, and sooner than later just an adjustment to the real supply and and demand turns into a full blown momentum taking the price to levels never seen before. 

Before we get any deeper, one needs to understand the fact that Commodities are fundamentally driven by supply & demand, and inventory levels.IF demand is high, but there is an inventory build up the first question is Why is there too much inventory with supply being so high, and prices rising ? 

Well answer might either be supply is already higher, higher the prices get it dries up the demand , or the higher prices are solely a function of money supply ( which is merely inflation, more good chasing the same quantity of products) 

To prove our point we go more into detail and look at a Graph Comparing the Price of Copper against its inventory levels . It helps us understand the change in the price of late, but raises an eyebrow when inventory seems to be rising off late. 

The White Line Represents the Inventory levels , where as the orange one represent prices.

Disclaimer : We would like to request the readers not to use the data for any commercial use, it is solely intended for educational purposes, and we do not take any liability for any of the investment losses. Do consult your financial advisor before making any investment decisions.