A 20,000-ton copper delivery into LME warehouses slashed the cash-to-three-month spread by over 50% in a single session.
Copper’s cash-to-three-month spread on the London Metal Exchange collapsed to $248 a ton from Monday’s peak of $545 after traders delivered over 20,000 tons into LME warehouses. The one-day stock build was the largest since April and eased the tightness that had driven the backwardation to its widest level since 2021.
The spread had surged earlier in the week amid low inventories and strong demand, but the influx of metal, including a significant portion from Trafigura Group, reversed the squeeze. Traders anticipate additional deliveries in the coming days, further loosening supply constraints.
The immediate market reaction saw copper prices stabilize as the backwardation narrowed, reducing the premium for immediate delivery and signaling improved near-term availability.