Copper Prices Surge on Inventory Shortages and Contract Expiry

LME copper prices surged to $14,172.5/mt on August 13, up 0.26% from the previous day, as investors rushed to cover short positions ahead of the expiry of next week's benchmark contract.

The LME spot copper contract's premium over the three-month copper contract reached a record high of $434/mt, exceeding the $45/mt seen two weeks earlier and matching the level last seen in October 2021 when it exceeded $1,100.

On the Shanghai Futures Exchange (SHFE), copper prices also rose, with the most-traded SHFE copper 2609 contract closing at 108,200 yuan/mt, up 0.49% from the previous day.

The sharp price increase on both exchanges highlights a severe inventory shortage and indicates that copper prices are expected to rebound significantly after the contract rollover.