Copper Prices Surge on China Restocking Bids Amid Tight Supply
Copper prices have been on a five-day winning streak as traders anticipate that Chinese buyers will restock before upcoming holidays. This surge in demand comes at a time when London Metal Exchange (LME) warehouse supplies are dwindling, with available stocks down to 133,725 tons after recent cancellations.
Ole Hansen from Saxo Bank notes that speculative interest has returned despite funds trimming bullish positions in US Comex copper futures. This is partly due to uncertainty surrounding potential refined-copper tariffs from the White House.
The LME cash spread's significant swing from a $86 discount versus three-month copper on September 14th to a $47-per-ton premium is a warning sign for copper's front end. With available LME inventories at historic lows, this scarcity can increase the cost of carrying short positions or hedging near-term exposure.