Copper Nears Record High as Supply Tensions Build
Copper prices are on the rise, nearing a record high as tensions in supply build. The metal's spot price has surged to $478 per ton above contracts for delivery in three months on the London Metal Exchange, its largest gap since 2021. This backwardation structure is indicative of near-term demand outstripping availability.
The metal's price increase is due in part to a massive flow of copper into the US, anticipating a tariff decision from the Trump administration that has left markets elsewhere with less material. A focus now shifts to whether China might start exporting some shipments to alleviate the crunch.
LME-tracked inventories have shrunk to just above 200,000 tons, the smallest volume since February. The ballooning backwardation can indicate a market squeeze, where holders of short positions scramble to secure physical metal for delivery.