Copper Squeeze Hits London Metal Exchange as Traders Hold Tight

A copper shortage is gripping the London Metal Exchange (LME), where a handful of traders now hold claims on more copper than the exchange can readily deliver.

The squeeze has been building for months, with copper stockpiles inside LME warehouses falling for 42 straight trading days in August, the longest losing streak since 2014.

Roughly 205,000 tonnes sat in the system near the low point, but nearly half was already cancelled for withdrawal. Large long positions had built up against a shrinking pool of deliverable metal, with one trader holding a dominant warrant and cash position in the LME's disclosure bands.

The price told the same story, with spot copper trading as much as $370 a tonne above September futures in recent weeks. The cash-to-three-month spread blew out to as much as $545 a tonne before easing.