LME Faces Record Copper Prices Amid Supply Squeeze
The London Metal Exchange (LME) has been experiencing a short-term supply squeeze in copper prices, causing a rapid rise in prices and position rollover costs.
August is typically considered a quiet period for copper trading, but this year the market has seen a sharp increase in physical copper becoming harder to secure, with delivery premiums surging.
The premium for immediate copper delivery over the three-month contract reached $545 per metric ton on August 19, marking the largest backwardation since 2021. The cash price of copper also set a new record, rising to $14,912 per ton.
A combination of low inventories and large positions in the cash market created difficult conditions for traders who had sold copper without physically holding it.