In other words, China is stockpiling copper -- storing it away in warehouses -- but not using it.
Key to this thesis is that at some point China will release the surplus into the market.
Combine that little tidbit with the fact that the copper market has been driven by speculators -- betting on global growth -- and we may have a problem on our hands.
”What we have now is we have a unique situation, whereby we have a surplus and production has gone up,” Threlkeld says.
At first glance a bubble in the copper market may not seem as troublesome as say – a bubble in the real estate market – but when you dig down, it gets scary.
Copper is a key metal used in construction and demand is often used as a barometer to measure the health in this area of the economy. If the market isn't factoring in this oversupply -- the ripple could be wide ranging.
However, not everybody sees it that way. Certainly not Tim Seymour who's long term bullish on global growth.
What do you think We want to know!
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Trader disclosure: On February 9th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (JPM), (JPM) Feb. Call Spreads, (JPM) Feb. Calls; Terranova Owns (DELL), (EMC), (MSFT), (AAPL), (OIH); Terranova Owns (GOOG), Is Short (GOOG) Feb. calls; Pete Najarian Owns (AAPL) Call Spread; Pete Najarian Owns (DIS), Is Short (DIS) Calls; Pete Najarian Owns (MGM) Call Spread; Pete Najarian Owns (MS), Is Short (MS) Calls; Pete Najarian Owns (TCK), Is Short (TCK) CallsPete Najarian Owns (XLF) Calls; Pete Najarian Owns (PBR) Puts; Pete Najarian Owns (BTU) Call Spread; Seymour Owns (MPEL), (AAPL), (BAC), (EEM), (F), (FXI), (LVS), (MGM), (MSFT)
For Tim Seymour
Seygem Asset Management Owns (PBR)
Seygem Asset Management Is Short (BIDU)
Seygem Asset Management Owns (FCX)
For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)
For Mike Khouw
Cantor Fitzgerald & Co. Is A Market Maker In (SPY)
Cantor Fitzgerald & Co. Is A Market Maker In (LVS)
Cantor Fitzgerald & Co. Is A Market Maker In (MGM)
Cantor Fitzgerald & Co. Is A Market Maker In (WYNN)
Cantor Fitzgerald & Co. Is A Market Maker In (GOOG)
Cantor Fitzgerald & Co. Is A Market Maker In (BIDU)
Cantor Fitzgerald & Co. Is A Market Maker In (YHOO)
Cantor Fitzgerald & Co. Is A Market Maker In (MSFT)
Other Relevant Disclosures:
Najarian Owned (DIS) And Was Short (DIS) Calls Today
Jon Najarian Owns (DIS)
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