Copper Backwardation Collapses After 20,000 Tons Hit LME Warehouses
World's Largest Electric Plane Flies for 27 Minutes on $5 of Power What I Cover My focus spans the global energy landscape and the technologies reshaping it, specifically focusing on oil and gas, renewables, and tech-driven market… Trafigura Group and several other traders delivered more than 20,000 tons of copper into LME warehouses on Tuesday, the biggest one-day build in on-warrant stock since April, and the squeeze that had gripped the London market for the past week came apart.
The cash-to-three-month spread settled at a $248-a-ton backwardation, down from as much as $545 on Monday, which was the widest since 2021.
Trafigura was behind a large share of the metalplaced on warrant, according to people familiar with the deliveries, and traders expect more to follow in the coming days.
A Trafigura spokesperson declined to comment.
At $545, selling metal now and buying it back three months out at a discount had finally become worth more than the trade everyone had been running instead, which wasshipping cathode to the U.S.and waiting on a tariff ruling that still hasn’t come.
David Wilson, head of metals strategy at BNP Paribas,put the question to clientson Monday: “why would you deliver to the LME” when you can still ship into the States? SetOilPrice.comas a preferred source in Googlehere.
Wednesday is the third Wednesday of the month, where the bulk of LME liquidity sits, and shorts had spent days buying cash and selling forward into warehouses with nothing in them.
Tom/next, the cost of rolling a position forward a single day, hit $110 before closing at a $79 premium.
Even after last week’s recovery, on-warrant stock is down roughly 75% from its mid-April peak.
The Commerce Department’s recommendation on refined copper duties wasdue June 30and has not been published, leaving aproposed 15% tarifffor January 2027, rising to 30% in 2028, unresolved.
either way: about 56,000 tons in the first two weeks of August, according to shipping data compiled by IHS Markit, roughly the monthly average onceJuly’s record 223,000-ton inflowis stripped out.
Societe Generale reads the current Comex premium as implying about a14.6% chancethe duty arrives on schedule.
| Product | Price | Change |
|---|---|---|
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| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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