LME Copper Squeeze Eases as 20,000 Tons Hit Warehouse
The London Metal Exchange (LME) warehouse saw its largest one-day build in on-warrant stock since April, with over 20,000 tons of copper delivered by Trafigura Group and other traders. This influx of metal has caused the cash-to-three-month spread to collapse, settling at a $248-a-ton backwardation, down from as much as $545 on Monday.
The squeeze that had gripped the London market for the past week came apart after these deliveries. The current Comex premium implies about a 14.6% chance that the proposed 15% tariff for refined copper duties will be implemented on schedule.
Despite this, supply isn't expected to close the gap between the LME and Comex prices. Chile has cut its production forecast twice this year, and Freeport's Gresik smelter in Indonesia has been offline since August 8.