Reuters reported that copper stocks held by Chinese investors are unlikely to flood the market any time soon.

Mr John MacKenzie head of Anglo American's copper business said some market players are concerned that rising stocks held by investors as collateral in China not immediately visible to the market could significantly reduce an expected copper deficit that has catapulted prices to records this year. I would be really surprised if those stocks flood the market.

Mr MacKenzie said that high copper prices could prompt industries to look to alternatives to copper but said the metal's conductive and anti-bacterial properties make it hard to substitute.

Analysts said that non mining companies in China have been buying copper to use as collateral for loans. It is unclear how much stockpiled copper is actually being used as an investment tool in China and some analysts see it as a significant risk.

(Sourced from Reuters)