Copper Prices Soar Past $14,000 as LME Stock Levels Plummet
Copper prices have surged past $14,000 a ton as stock levels on the London Metal Exchange (LME) continue to dwindle. Data from the LME shows that deliverable warehouse stock is being rapidly depleted, with 7,225 tons set for removal this week, leaving just 94,200 tons available.
This shortage has driven up the cash price of copper, which now trades at a $105-per-ton premium to the three-month contract - the steepest backwardation since January. Backwardation occurs when the market pays extra for immediate delivery, making it costly for traders to stay short near-term contracts.
The LME data also highlights a significant shift in supply and demand dynamics, with many 'canceled warrants' - metal marked for exit - concentrated in New Orleans, a key US storage hub. This has raised concerns about the potential impact on global markets and the aluminum price, which has also been affected by shipping risks in the Strait of Hormuz.