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Copper inventories surge at the LME, easing a recent squeeze
LME on-warrant stocks jumped by 63,000 tonnes in three days, pulling the cash-to-three-month spread down to about $176 per tonne from $436 at Monday’s close.
London Metal Exchange copper inventories rose by more than 50% over three days, easing fears of an acute supply squeeze and narrowing the key cash versus three month spread, according to Mining.com. On-warrant copper stocks increased by 63,000 tonnes between Aug. 17 and Aug. 19, with higher totals reported across Asia, the US, and Europe.
Deliveries added 28,000 tonnes to total LME stocks, as metal flowed onto the exchange and previously cancelled inventory was re-warranted. Benchmark Mineral Intelligence copper analyst Albert Mackenzie said the deliveries alleviate fears of extreme nearby tightness for now, while noting inventories will be closely watched for signals on price movement.
The inventory rebound came after LME inventories fell earlier, helping drive a steep backwardation where prompt deliveries trade at a premium to later contracts. Benchmark Mineral Intelligence said the LME cash-to-three-month backwardation reached nearly $550 per tonne at points on Monday, with more than $400 per tonne of that premium concentrated between the August and September contracts.
Mining.com reported that US tariff uncertainty has distorted global copper flows, drawing large volumes of copper to the US and making supplies elsewhere appear tighter. By Wednesday, the cash-to-three-month spread fell to about $176 per tonne from roughly $436 per tonne at Monday’s close, and three-month copper was quoted at $13,885 per tonne, down nearly $300 since Monday.
Latest closeCopper $6.606 ▲0.2%