Copper Squeeze Eases as Traders Deliver Metal to London Metal Exchange

The copper market squeeze eased on Tuesday after traders delivered significant amounts of metal to the London Metal Exchange (LME). The spread between copper for immediate delivery and metal delivered three months out dropped to $248 a metric ton, down from a backwardation of as much as $545 seen Monday.

Trafigura Group was among the largest contributors to the deliveries, with people familiar with the matter stating that they were behind a significant share of the copper placed onto the LME on Tuesday. Other traders are also expected to bring metal onto the exchange in the coming days.

The easing of the squeeze is attributed to an increase in readily available copper inventories in the LME's global warehouse network, which saw a gain of more than 20,000 tons. This represents the largest increase since April and has helped to reduce the pressure on the market.