Copper is experiencing an historic squeeze as traders react to rapidly falling inventories, potential US tariffs, and a pricing crisis at smelters.
In a bid to cover short positions on the London Metal Exchange some Chinese smelters are rapidly ramping up exports.
At least 30,000 tons of copper from smelters including Jiangxi Copper and Tongling Nonferrous Metals Group are poised to be delivered to LME warehouses in Asia in the coming weeks, anonymous sources told Bloomberg on Wednesday.
Copper smelters hedge the cost of concentrates to protect against significant price swings but the substantial backwardation could lead to losses if physical metal is not delivered in time.
Spot copper traded at around $400 per tonne premium to three-month futures this week, the highest level since a record surge in 2021, pushing the market into one of the steepest backwardations in history.
Backwardation…
