Commodities
LME Copper Squeeze Unwinds as Backwardation Halves to $255
The copper market has seen a significant shift in recent days, with the London Metal Exchange (LME) cash-to-three-month backwardation halving from $535 to $255. This decrease is attributed to an increase of 15,725 tonnes in warehouse stocks, indicating that the squeeze may be unwinding.
Meanwhile, COMEX copper held about 667,200 tonnes, with speculative net length totaling roughly 911,585 tonnes. This has led to positioning becoming crowded as the U.S. tariff premium fades.
The bearish base case targets COMEX copper at $6.30 into the September LME expiry and $6.18 in Q4, while a close above $6.90 would invalidate this setup.